The judgment was the first from a big Tesla stockholder and came as the company's board confirmed that it was evaluating the $72 billion proposal from Mr Musk, who said that he was considering taking the business private and had the necessary funding in...
The board had "met several times over the last week" to discuss going private, the statement said.
Some of the fervour for a Tesla buyout faded on Wednesday. "Why announce it to the world in this way. which could significantly contribute to the required premium and leverage?".
Musk has 22.3 million followers on Twitter, and Tesla's share price was already rising after the Financial Timesreported that Saudi Arabia's sovereign wealth fund had taken a $2bn stake in the company. "As a public company, we are subject to wild swings in our stock price that can be a major distraction for everyone working at Tesla".
Ironically, Tesla's shares shot up by 11% following his tweet.
"If I were shorting this stock, I'd be sweating bullets", said O'Leary.
On Wednesday, Breitbart News' Economics and Finance editor John Carney expressed doubts about plans to take Tesla private, suggesting the move may face insurmountable legal headwinds.
It's unclear if Musk has misled investors, let alone whether he has done so intentionally.
Morgan Stanley analyst Adam Jonas questioned Musk's method for disclosing the move, as well as the $420 per share price point, which is well above Tesla's all-time high. Many initially thought it was Elon Musk's attempt at a bad joke about marijuana, because "420" has always been associated with pot.
If Musk's tweet was indeed not a joke, another problem is that it could have been illegal.
Musk also wants Tesla's employees to remain shareholders.
An SEC investigation would be the latest among a string of recent hiccups for Musk and Tesla. "Your disclosures should create certainty in the market so that everyone has a fair and complete understanding of what is going on", Goody said.