On Friday, the Wall Street Journal's Tim Higgins warned that the SEC forcing Musk's exit "could spook investors enough to send the stock price spiraling, hurting Tesla's ability to raise the cash analysts say is required".
The US Securities and Exchange Commission could force Musk to step down as boss of his own company.
According to the SEC filings, Musk said that calculation resulted in a price of $419, which he rounded up to $420 "because he had recently learned about the number's significance in marijuana culture and thought his girlfriend 'would find it amusing, which admittedly is not a great reason to pick a price'". Now the case looks set to go to court, another headache for Musk to deal with.
"This unjustified action by the SEC leaves me deeply saddened and disappointed", Musk said in an emailed statement.
Musk, 47, is the public face of Tesla and J.P. Morgan analyst Ryan Brinkman questioned how easy it would be for the US$50-billion manufacturer, which is still losing money, to raise funds at affordable rates without him. "Integrity is the most important value in my life and the facts will show I never compromised this in any way", he said.
Tesla plunged as much as 14 percent in early trading Friday after the U.S. Securities and Exchange Commission alleged that Musk committed fraud by tweeting last month that he'd secured funding to take the company private. Later that day, the SEC held a press conference where co-director of enforcement Steven Peikin spoke specifically to reference the significance of Musk's chosen share buyback number.
Oil eases, but Iran sanctions keep Brent above $80 a barrel
Last week, gasoline stockpiles added 1.5 million barrels while distillate inventories went down by 2.2 million barrels. On Tuesday, Brent oil hit $82 per barrel for the first time since 2014.
According to the complaint, Musk met with representatives of a sovereign investment fund for 30 to 45 minutes on July 31 at Tesla's Fremont, California, factory. The SEC filed the complaint in federal court Thursday, alleging Musk misled investors when he tweeted on August 7 that he had obtained funding.
"Musk acknowledged that no specific deal terms had been established at the meeting and there was no discussion of what would or would not be considered reasonable".
Tesla shares were down down less than 1% this year through Thursday.
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.
At least five research firms said Musk might have to resign following the SEC lawsuit. In other words, Musk wouldn't take the settlement because that would imply that he did something wrong, and he doesn't think he did.