Even though Musk has 22.3 million followers on Twitter, Tesla probably should have ensured even wider distribution of the news by simultaneously posting information on its website and filing documents with the SEC, Coffee and Henning said.
"For most folks who own Tesla and SpaceX, they recognize these are long-term investments", the ex-employee said. Elon Musk has a few things on his side such as excessive dry powder in private equity, a sizable personal stake in Tesla, and a relatively low interest rate environment.
"What investors are waiting for is more details around what is meant when Elon Musk says funding is secured", George Galliers, an analyst at Evercore ISI, also said on Bloomberg Television.
The Tesla CEO said in a Twitter post on Tuesday that his plan for a privatised Tesla has been supported by investors. Other SpaceX investors have stakes in the company through the special objective funds, or special goal vehicles.
Thursday's declines also wiped out the smaller gains that came just before Musk's tweet, when the Financial Times reported that Saudi Arabia's public investment fund had invested $2 billion in the company.
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.
Tesla's board is forging ahead with its review of Elon Musk's bold and ambiguous gambit to take the electric-vehicle maker private. And because shares would no longer be traded on an exchange, short sellers would be shut out.
Musk's tweets about how Tesla could structure the deal has left $370 billion asset manager Janus Henderson Group Plc perplexed.
"They can set the price and where the shares are going", said Justin Byers, chief data officer for the Prime Unicorn Index, which tracks the performance of 102 private USA companies valued at $500 million or more. "I, like a great many others, am confused by what is motivating" the go-private plan and "why it was communicated in the way it was". Twenty-seven of the 30 companies that make up the Dow Jones Industrial Average have turned over since I entered the workforce (most recently GE, which got the boot, essentially, for failing to anticipate the impact of renewable energy on its power division).
According to Probes Reporter, a research firm focusing on undisclosed SEC investigations, the SEC investigated Tesla from June 2016 to May 2017 regarding the Model 3 sedan.
Nevertheless, this quarter cycle decision making would affect the company only for short term but not for long term purposes and according to Elson Musk, this long term decision is the reason behind every successful company.
Public companies have four days to report certain material events that shareholders should know about to the US Securities and Exchange Commission. After nearing an all-time record, Tesla's share price settling back to barely above where it started.
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.