Electric carmaker Tesla (TSLA) could be going private, according to a tweet by its mercurial CEO, Elon Musk. If true, it’s a boon for shareholders.

But if it’s not true, Tesla is in trouble, and shareholders may feel the pain. “If funding is secured, then it’s a factual statement,” says John C. Coffee, director of the Center on Corporate Governance at Columbia Law School. “But if he can’t prove that, he’s in some danger of a big lawsuit because short sellers will be devastated by this.”

On Aug. 7, Musk tweeted: “Am considering taking Tesla private at $420. Funding secured.” Those nine words sent the stock soaring from $342 to around $370, an 8% jump. Then the Nasdaq exchange temporarily halted trading in the shares, pending clarification of material news by the company.

About three hours after his momentous tweet, Musk posted a message to employees explaining his rationale for going private. He cited “wild swings” in the stock price and frequent attacks by short sellers as “a major distraction for everyone working at Tesla.” He said Space X, the rocket-launching company where Musk is also CEO, is an example of a privately-owned company better able to focus on a complex long-term mission, and a possible model for Tesla. “A final decision has not yet been made,” he said. Trading on the NASDAQ resumed after Tesla posted the message.

Tesla is both a loved and hated stock, with backers extolling Musks’s visionary ideas and critics waiting for the company to run out of money and collapse. Short interest in the company—traders betting the stock will go down—represent 20% of shares outstanding. That’s high. Short interest is just 1.7% at General Motors and 0.9% at Apple. Musk has called short-sellers “haters” and accused them of trying to wreck his company.

[See why the Tesla Model 3 will be a great car–some day.]

If Musk’s aim was to temporarily boost Tesla’s stock in order to force losses on short sellers, it could be considered stock manipulation, which is illegal. “That’s too inviting to a plaintiff’s lawyer not to sue,” says Coffee. “This would be an attractive lawsuit. The people who think he’s manipulating the market would say they’ve suffered an injury, and you could pull all those losses together in a class action.”

If, on the other hand, Musk can demonstrate that he has actually arranged financing for a private buyout, or made serious efforts to do so, he might be off the hook.

Shortly before Musk posted his tweet, the Financial Times reported that Saudi Arabia’s sovereign wealth fund has bought about $2 billion worth of Tesla shares, representing a 4.5% stake in the company. So Saudi money could be part of a buyout offer.