Tesla investors are arguing in several pending lawsuits that the move, in which Musk pledged to buy back outstanding shares from investors at an elevated price, amounted to market manipulation or fraud. Tesla's stock dropped more than 4 percent Tuesday after the news, which Bloomberg first reported. Its stock is now trading 25 percent lower than it was on the day of Musk's tweet. Nathan Bomey of USA Today reported that Tesla could face major sanctions : But later in August, Musk abandoned the bid, saying his financial advisers had decided it wasn't a worthwhile effort and would have unintended consequences. Tesla will stay public. Bloomberg said the investigation centers on the possibility of "fraud." Federal authorities can crack down on companies or investors who intentionally mislead investors. Companies convicted of fraud can face sanctions, including major financial penalties, while individuals can face fines, restrictions on their future business activity and prison time.