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More questions than Model 3s?

Tesla (TSLA) - Get Tesla Inc. Report shares extended declines Thursday as investors questioned the ability of Elon Musk to take the company private and reacted to reports of a potential probe into Tweets by the founder and CEO that claimed he had "funding secured" for the $72 billion purchase. 

The Wall Street Journal reported Wednesday that the Securities and Exchange Commission is looking into the veracity of Musk's Tweet, which was sent at 12:48 eastern time on Tuesday, Aug. 7, and why the CEO opted to inform investors of his plans via social media as opposed to a formal filing with regulators. Those questions were intensified by a statement signed by six members of Tesla's nine-member board yesterday which said that "several" discussions about taking the group private were held last week.

"Elon opened a discussion with the board about taking the company private," the statement said. "This included discussion as to how being private could better serve Tesla's long-term interests, and also addressed the funding for this to occur."

Tesla shares were marked 3% lower in the opening 30 minutes of trading and changing hands at $359.16 each, a move that would still leave it around 4.8% higher than before Musk's "considering taking Tesla private at $420. Funding secured" Tweet at mid-day Tuesday, but more than $10 billion shy of his proposed takeout value.

SEC public affairs spokesman Chris Carofine told TheStreet that the agency is declining to comment.

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Taking Tesla private at Musk's stated value would likely require the biggest leverage buyout in U.S. corporate history, a tactic that could prove incredibly challenging for a company that burned through $740 million in cash each quarter, has a issuer credit rating of B3 at Moody's Investors Service, struggles under a $10.9 billion debt pile and has consistently failed to meet its own production and delivery targets.

That said, with Saudi Arabia's reported $2 billion stake, and its association with SoftBank Corp.'s (SFTBY) tech-focused Vision Fund, Musk could find potential sources of debt capital to fund the billions needed to pull Tesla from listed markets.

China's Tencent Holdings (TCEHY) , as well, could seek to lever its 10% stake in an LBO transaction given Musk's plans to build a gigafactory in Shanghai as part of his plans to sell Tesla sedans into the world's biggest car market.

One concern investors may have with respect to Tesla's potential funding relates to recent moves by the Trump administration to consider import tariffs on the auto sector under Section 232 of the Trade Expansion Act, which allows for such moves under the broader guise of national security.

Although that decision is currently under consultation, its debate could influence non-U.S. funding sources, such as Saudi Arabia's sovereign wealth fund, which has reportedly built a $2 billion stake in the Palo Alto, Calif.-based carmaker, and SoftBank Corp. of Japan, which has close ties to the Chinese government.

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Both would face scrutiny from the Committee on Foreign Investment in the United States, or CFIUS, an inter-agency panel that examines foreign investment plans and is chaired by Treasury Secretary Steve Mnuchin.

Tesla's recently-announced plans to open gigafactories in China, while simultaneously laying off workers at its production facilities in Southern California, would likely mean a longer, more detailed probe into external investment plans from CFiUS amid Trump's "Buy American, Hire American" trade policy.

"Basically, I'm trying to accomplish an outcome where Tesla can operate at its best, free from as much distraction and short-term thinking as possible, and where there is as little change for all of our investors, including all of our employees, as possible," Musk told investors.