U.S. regulators are asking Tesla Inc (TSLA.O) why Chief Executive Elon Musk announced his plan to take the electric carmaker private on Twitter and whether his statement was truthful, the Wall Street Journal reported on Wednesday.

Musk announced his plan on his personal Twitter account on Tuesday, and the U.S. Securities and Exchange Commission has asked Tesla about the facts of the matter, why it was disclosed on Twitter rather than in a regulatory filing and whether it believed investor-protection rules had been met, the Journal said.

The agency declined to comment and Tesla did not immediately respond to requests for comment.

Tesla shares fell 2.4 percent to $370.34 on Wednesday after closing up 11 percent on Tuesday, ending about $50 per share below what Musk said he was considering offering.

Musk had dropped the surprise plan in a terse tweet, saying, “Am considering taking Tesla private at $420. Funding secured.”

He has not provided details or evidence of the funding by Twitter or in a following blog posted on the Tesla web site, and several securities attorneys told Reuters Musk could face investor lawsuits if it was proven he did not have secure financing at the time of his tweet.

“The words ‘financing secured’ are the danger point – that’s a statement of fact and could set him up to be accused of a material misstatement if it’s proven false,” said Erik Gordon, an assistant professor at University of Michigan’s Ross School of Business with a background in law.

Using Twitter to announce materially important information is not common, but the SEC allows companies to use social media to announce key information in compliance with its fair disclosure rules if investors are alerted about which outlets will be used.

Musk is a prolific tweeter and Tesla alerted investors in a 2013 SEC filing that they should follow Musk’s Twitter feed for “additional information” about the company.

There is no reference to Musk’s Twitter account on the company’s investor relations page under “investor communication,” although Tesla’s Twitter feed is included.

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 of debt and its bonds are rated junk by credit ratings agencies.

“Who gives $30 to $50 billion to buy back the shares?” asked NordLB analyst Frank Schwope. “And if you stay as a shareholder you get less information than before and you depend more and more on Elon Musk.”

BIGGEST LBO

Tesla’s board on earlier on Wednesday said it was evaluating taking the company private, which would be the biggest leveraged buyout of all time.

In a statement on Tesla's website bit.ly/2vJiaMm, six of Tesla's nine directors said the board had met several times over the last week to discuss such an idea and was "taking the appropriate next steps to evaluate this."

Musk’s plan for a price of $420 a share would value a deal at more than $70 billion.

Tesla said on Wednesday the discussions had addressed the issue of how to fund such a deal, but gave no details. The statement did not address how the $420-per-share price was established.

Public companies have four days here to report certain material events that shareholders should know about to the U.S. Securities and Exchange Commission.

The deal would be the biggest leveraged buyout of all time, beating the $45 billion record set by Texas power utility Energy Future Holdings.

The most obvious equity partners for Musk would be a sovereign wealth fund such as Saudi Arabia’s Public Investment Fund (PIF), which sources said on Tuesday had taken a stake of just below 5 percent in Tesla, or a major technology investment fund such as SoftBank Group Corp’s (9984.T) Vision Fund, bankers said.

SoftBank is currently not interested in a deal for Tesla after earlier this year taking a stake in General Motors Co’s (GM.N) self-driving unit, Cruise, Reuters reported earlier on Wednesday.

Musk and SoftBank held unsuccessful talks about a take-private deal in April 2017, according to a source familiar with the matter. Bloomberg News, which first reported on that meeting, said the talks failed to progress due to disagreements over ownership.

China’s Tencent Holdings Ltd (0700.HK), which took a 5 percent stake in Tesla last year, could also be a possible partner.

SURPRISE MOVE

In a letter here after his tweet on Tuesday, Musk fleshed out his idea, suggesting shareholders would get the option to sell their shares or remain investors in a private Tesla, out of the glare of Wall Street and its need for positive quarterly results.

He said that would allow Tesla to “operate at its best, free from as much distraction and short-term thinking as possible.”

Some on Wall Street shared that view.

“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. Korus said he would need more details from Musk to judge whether a buyout offer would be practical and at what price it would be attractive.

Musk has been under intense pressure this year to turn his company into a profitable higher-volume manufacturer, a prospect that has sent Tesla’s valuation higher than that of GM.

The company is still working its way out of what Musk called “production hell” at its home factory in Fremont, California, where a series of manufacturing challenges delayed the ramp-up of production of its new Model 3 sedan, on which the company’s profitability rests.

Musk has feuded publicly with regulators, critics, short sellers and reporters, and some analysts suggested that less transparency would be welcomed by Musk.

The six board members who issued the statement on Wednesday included James Murdoch, chief executive of Twenty-First Century Fox Inc (FOXA.O) and Brad Buss, who was the chief financial officer of solar panel maker SolarCity until it was bought by Tesla in 2016.

Other board members mentioned in the statement included Robyn Denholm, Ira Ehrenpreis, Antonio Gracias and Linda Johnson Rice. Tesla’s other board members are Musk, his brother Kimbal Musk and venture capitalist Steve Jurvetson.