Opinion: Hey Elon Musk, where’s the funding to take Tesla private?

It’s now been several days since Elon Musk roiled the U.S. markets with a tweet contending that funding was secured to take Tesla private at $420 a share in what would be the largest corporate private buyout ever, and his silence since is deafening.

Every hour that goes by without proof the funding exists and is dedicated to such a transaction feels like more proof that it does not, and only feeds the same short-selling doubters that Musk was apparently looking to thwart with his tweet. And if Musk never does prove that he had funding lined up when he made the statement, it should be the final straw that ends his time as CEO of Tesla TSLA, +0.86%  .

On Tuesday, Musk’s tweet — the Wall Street equivalent of yelling fire in a crowded theater — caused trading to be halted in Tesla stock and then sent the car maker’s shares surging 11%. Those gains gradually eroded, as no further specifics such as funding sources were disclosed, until by the end of Friday’s session they had mostly disappeared

Tesla still has not filed an 8K with the Securities and Exchange Commission explaining the news (it has 30 days to do so), so its only confirmation was a blog post with Musk’s email to employees and a statement from the board the following day, saying the board had met several times to discuss this and that it was “taking the appropriate steps to evaluate this.”

In an email on Friday, a spokesperson for the electric car maker declined to comment beyond those statements, which did not give any indication that funding was indeed secure.

By Friday, several reports had added to doubts about Musk’s contention. Bloomberg reported Friday that Musk and his advisers are “seeking a wide pool of investors” and are in discussions with banks about “the feasibility and structure of a possible deal.”

Stephen Diamond, an associate professor of law at Santa Clara University School of Law, said the Bloomberg report, as well as the lack of specifics from Tesla this week, indicate there is no funding.

“Those headlines suggest that they are scouring around for funding and that contradicts the tweet, and that is the problem,” Diamond said. “It looks like it is pretty half-baked. Then you have to ask yourself what is really going on here.”

Musk has opened himself up for potential litigation. Earlier in the week, another corporate governance expert, John Coffee Jr., the director of the corporate governance center at Columbia Law School, said that if Musk’s comments were not about a serious bid, short sellers in Tesla’s stock “can sue on the grounds that this as an artificial and fraudulent manipulation of the stock, which violates Rule 10b-5.”

The Securities and Exchange Commission is already looking at Musk’s tweets earlier in the week, according to the Wall Street Journal, to determine whether he was truthful.

In addition, the board’s belated reaction to the news indicates that it too was scrambling to respond, another confirmation that the board mostly rubber stamps whatever Musk proposes.

“This shows they are in way over their head,” said Diamond, who advised the CtW (Change to Win) Investment Group in an effort that sought to get more independent directors on Tesla’s board. Currently, the board includes Musk’s brother Kimbal Musk and venture capitalist and early Tesla investor Steve Jurvetson, who has been on leave since he left his venture capital firm after allegations of sexual harassment.

“This is chaotic, it is not transparent. There is nothing about this process that is recognizable within the bandwidth of good corporate governance,” Diamond said. “If he had the funding secured, we would have already heard, I think it’s BS, I think he lied and I think he should be called on it. I think he should be ousted for this. To me it’s just egregious behavior, to mislead the market about this.”

While Musk has achieved a great deal while running the electric car company, he is reckless in his statements about a publicly traded company, and seems to have a brazen carelessness about the concept of fiduciary duty. If Tesla does not have funding in hand for the biggest going-private deal ever, Musk should suffer the consequences.