CEO over tweets may cost the carkmaker's shareholders close to $20 billion.
Musk, 47, walked away at the last minute from a settlement with the SEC that would have required him to give up key leadership roles at the company for two years and pay a nominal fine, according to reports on Friday.
Musk also promised on Twitter that retail investors would be able to maintain their stake in a private Tesla, even though, SEC officials alleged, he had been told before tweeting that this would be "very hard".
Watch Tesla trade in real time here. That will be more of a challenge with Musk's future in doubt, Osbourne said. "Funding secured." Tesla's stock surged 11% that day but plunged over the following weeks as it became apparent that the CEO was tweeting by the seat of his trousers.
As a result, Musk is now facing an SEC lawsuit that accuses him of fraud because his tweets were "false and misleading statements".
The SEC launched its probe in part to ascertain if Musk tweeted about taking the company private in order to hurt investors with short positions in the company's shares.
The announcement caused the share price to spike and Musk later retracted his statement.
The statements, the complaint said "were premised on a long series of baseless assumptions and were contrary to facts that Musk knew".
The prospect of having the fraud charges and Musk's potential departure hanging over Tesla led to an immediate 12 percent drop in the company's share prices today.
The last meeting on July 31 lacked discussion of the fund's specific ownership share in a private company, the premium to be offered to current Tesla shareholders, regulatory hurdles or the board approval process. "But what has kept Tesla's stock hoisted is the perpetual tweets and promises from Elon Musk, promises that he hasn't met", Johnson said. Tesla almost matched its all-time high after Musk said he had lined up funding to take the company private in a deal worth $420 a share. Later in the month, Tesla announced that the go-private plan had been scrapped.
Spiegel also echoed the concerns of corporate governance experts who have lambasted Tesla's board for being too beholden to a CEO that they are supposed to oversee.
In a statement, Tesla's board of directors said it remained "fully confident in Elon, his integrity, and his leadership of the company, which has resulted in the most successful US auto company in over a century".