A bet on Tesla Inc. is very much a bet on Elon Musk, which is why investors might be worried about a regulatory probe leading to the unconventional CEO's ouster.
Yet legal analysts argue that the U.S. Securities and Exchange Commission -- the federal agency that potentially holds Musk's fate in its hands -- is unlikely to try to remove him precisely because doing so would hurt shareholders.
Since Tesla is so closely identified with Musk, such a dramatic move would probably tank the electric carmaker's stock. That would trigger more pain for investors who've already lost money on their holdings while Musk mulled, and then quickly decided against, taking the company private.
The power to temporarily or permanently ban executives from serving as officers and directors of public companies is one of the most powerful enforcement tools the SEC wields. If the agency concludes that Musk, 47, intentionally misled investors when he wrote in an Aug. 7 tweet that he had "funding secured" to take the company private, the regulator could pursue a ban. Musk and Tesla would undoubtedly fight such punishment.
While the SEC hasn't acknowledged an investigation into Musk or the company, Bloomberg and other media outlets have reported that the regulator is looking into his tweets as well as earlier pronouncements that he and Tesla made about manufacturing and sales goals. Tesla has lost about $13 billion in market value in the aftermath of his Aug. 7 tweet.
Spokesmen for the SEC and Musk declined to comment.
SEC probes can take months or even years, and sometimes end with the agency deciding against bringing an enforcement action. In the meantime, speculation is rampant over how severely the regulator might sanction Musk and what that could mean for Tesla.
Here are answers to some key questions: