The reference to the company's stock is particularly relevant because Tesla shares immediately skyrocketed in the wake of Musk's tweet. Tesla shares rose 2.3 per cent to $360.61 in trading Friday before United States exchanges opened.
Tesla shares fell to $352.45, down about $4 from where they were before Musk's tweets on Tuesday sent them soaring to a near one-year high.
The SEC, which had already been gathering information on Tesla's public pronouncements, added questioning of whether Musk's claim that he had secured funding for a takeover to the inquiry was meant to be factual, Bloomberg said, citing people familiar with the matter.
The CEO apparently has the preliminary backing of the company's board of directors, six of whom issued a statement yesterday saying that Musk broached the subject recently and they were considering its merits. On Thursday, Aug. 9, Tesla shares have dropped back to near the level they were trading at before CEO Elon Musk tweeted Tuesday that he may take the company private.
The Tesla CEO said in a Twitter post on Tuesday that his plan for a privatised Tesla has been supported by investors. The current value of Tesla's shares stands at around $370 so a buyout at $420 would represent a roughly 20% premium at buyout, a defiantly tempting offer to get shareholders to sell their shares.
The SEC and Tesla declined Business Insider's requests for comment.
Given some of the outlandish remarks Elon Musk has a penchant for making on Twitter, it can sometimes be hard to discern when the Tesla CEO is being serious and when he's simply having a little bit of fun.
This sudden turn of events could be in favor of both parties, i.e Saudi PIF and Tesla, as Musk has been finding it hard keeping the company's objectives and management focused. It is not clear if PIF is interested in financing Musk's proposed take-private deal.
Musk has long battled publicly with short sellers of the stock.
Musk has also said he would be looking to keep his ownership of Tesla at around 20 percent, and that a special objective vehicle, like the one that exists at his aerospace company SpaceX, would allow Tesla shareholders to remain invested if they so choose.
One of the biggest questions surrounding the buyout is Tesla's long history of losing money while it has been investing in electric auto technology and ramping up production of its vehicles.
Just last week, he revealed he had been working 110 hours a week to deliver on short-term promises he had made to Wall Street, a load he traced to his boorish behavior toward two analysts earlier this year.
The stock spike after the earnings call led to Tesla short-sellers getting burnt by over US$2 billion.
Tesla has many mom-and-pop investors.
In a Wednesday research note, Morgan Stanley analyst Adam Jonas estimated Tesla will end up taking on about $50 billion in additional debt if the company goes private.