Tesla’s shares have fallen back to just above the level they were before they soared on Tuesday following Elon Musk’s tweet about taking his company private.
The price closed down 4.83% at $352.45 on Thursday, and has now lost almost all of the gains it made when the stock surged 11% to $379.57, before trading was halted on the Nasdaq.
Shares in the electric car maker had closed at $341.99 on Monday and were around the $342 mark on Tuesday before the big rise.
Thursday’s fall seemed to suggest that investors are wary of Mr Musk’s plans.
The Securities and Exchange Commission is understood to have already opened an inquiry into the tweet in which chief executive Mr Musk suggested he had funding in place to take Tesla private at a share price of $420.
Am considering taking Tesla private at $420. Funding secured.
— Elon Musk (@elonmusk) August 7, 2018
The Wall Street regulator is reported to have asked Tesla why plans to go private were disclosed on the social media platform rather than in a regulatory filing.
The SEC also asked the company whether it believed investor-protection rules had been met, according to the Wall Street Journal.
Shortly after the tweet Mr Musk wrote a blog post on the Tesla website, in which he said: “I fundamentally believe that we are at our best when everyone is focused on executing, when we can remain focused on our long-term mission, and when there are not perverse incentives for people to try to harm what we’re all trying to achieve.
“This is especially true for a company like Tesla that has a long-term, forward-looking mission.
“SpaceX is a perfect example: it is far more operationally efficient, and that is largely due to the fact that it is privately held.”
Tesla directors then said they had been aware of their chief executive’s plan for some time and were “evaluating it”.
Mr Musk is said to have also acknowledged he was serious about privatising the electric car maker in an email to employees.