Elon Musk has some ‘splainin’ to do.

The CEO is now facing a U.S. SEC inquiry into an eight-word tweet that he’s considering taking the company private.  “Am considering taking Tesla private at $420.  Funding secured,” he said.

Of course, such news sent the stock soaring.

With it, $1.3 billion of short-seller value went up in smoke.

But Musk had better hope his financing claims were true. 

If not, his tweet could amount to market manipulation if he didn’t really have financing in place.

That’s because there is still no indication of any secured funding.

In trying to clarify the situation, he said that ongoing discussions with Saudi Arabia’s Public Investment Fund had given him confidence to say he had financing.

“Going back almost two years, the Saudi Arabian sovereign wealth fund has approached me multiple times about taking Tesla private,” Musk wrote in a blog post. “They first met with me at the beginning of 2017 to express this interest because of the important need to diversify away from oil. They then held several additional meetings with me over the next year to reiterate this interest and to try to move forward with a going private transaction. Obviously, the Saudi sovereign fund has more than enough capital needed to execute on such a transaction.”

Again, there’s no funding in place, which means this was manipulation.

Investors caught off guard by the news have also questioned if Musk violated the SEC fair disclosure rules by releasing such information in an unconventional manner. Under Regulation FD for example, the SEC rule aims to promote “full and fair disclosure” of corporate information by requiring a level playing field for announcements of nonpublic information.

In short, Musk may be up a creek with no paddle.

In fact, he could face a range of penalties if the SEC determines his tweet was deceptive.  Those penalties range from a simple slap on the wrist to a fine to a ban on serving as an officer of a publicly traded company. The latter is unlikely.

Eight simply words lead to disaster that Musk has to explain.

Musk, you’ve got some ‘splainin’ to do.