Tesla's shares were down less than one per cent at $376.31 United States in morning trading on Wednesday after closing up 11 per cent at $379.57 United States on Tuesday.
Teresa Goody, a former SEC official, said Musk "did something inappropriate and caused chaos in the market" in a way that would likely draw scrutiny from investigators.
The statement, issued by six of Tesla's nine-member board, suggests Musk's controversial tweets, which led to the company's stock being suspended from trading for a time on Tuesday, were less spontaneous than originally believed and not designed simply to punish Tesla stock short-sellers. Musk, on Tuesday, announced he was mulling buying the company out for $420 per share.
But can Musk really strike a deal?
"This proposal to go private would ultimately be finalized through a vote of our shareholders", Musk said in explaining the potential move. But they did not reveal who or what institution Musk may have been referring to when he posted "funding secured".
Mr Musk had "opened a discussion with the board" last week, the six directors said.
It's unclear if Musk has misled investors, let alone whether he has done so intentionally.
The statement says Musk "addressed the funding for this to occur" in the conversations. "If the process ends the way I expect it will, a private Tesla would ultimately be an enormous opportunity for all of us".
One Tesla shareholder said he thought a deal to take Tesla private was doable. The fund then reportedly proceeded to buy large amounts of Tesla stock on secondary markets, according to the Financial Times, and is now one of Tesla's eight biggest shareholders.
The company also remains unprofitable and going private wouldn't change that.
"They're being bombarded with questions that we don't think are as relevant to the long-term value of the company", said Sam Korus, an analyst for ARK Investment Management, which had 443,874 Tesla shares as of June 30. That's a key reason why Michael Dell made a decision to list shares of Dell Technologies (DVMT) on Wall Street again after taking the company private in 2013.
Musk would have a lot more freedom to invest even more in solar roofs, the Tesla Semi truck and any other new products without having to incur the wrath of investors and analysts who question the strategy.
Some Wall Street analysts were skeptical of Musk's ability to gather the huge financial backing to complete such a deal, given that Tesla loses money, has $10.9 billion (8.5 billion pounds) of debt and its bonds are rated junk by credit ratings agencies.
Is $420 high enough of a price to take Tesla private?
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