The shares sank by as much as 7.1 percent earlier Tuesday after news broke that federal prosecutors have opened a criminal probe looking at his comments. Musk tweeted on Aug. 7 that he had secured funding at $420 a share to take the electric car maker private, sending the stock soaring 11 percent, near an all-time high that day to $387.46. All of those gains — and then some — have since been erased.
Tesla acknowledged that the agency asked for documents from the company after Musk's now infamous tweet in a statement released Tuesday:
"Last month, following Elon's announcement that he was considering taking the company private, Tesla received a voluntary request for documents from the DOJ and has been cooperative in responding to it. We have not received a subpoena, a request for testimony, or any other formal process. We respect the DOJ's desire to get information about this and believe that the matter should be quickly resolved as they review the information they have received."
Bloomberg said the Justice Department is running the criminal investigation in tandem with a civil fraud probe by the Securities and Exchange Commission of Musk's comments. It cited two people familiar with the matter.
In addition, The New York Times reported that the SEC has sent subpoenas to Goldman Sachs and Silver Lake, both of which Tesla engaged to help it evaluate the take-private proposal.
Tesla's value has fallen by almost a third since his initial tweet, wiping away nearly $18 billion in market capitalization. The stock rebounded somewhat from its intraday low Tuesday but was still down by about 3 percent at $285.92 a share.
Musk had been taunting short sellers all summer, blaming them for driving down the company's shares. Tesla is among the most shorted stocks in the Standard & Poor's 500-stock index.
He tweeted May 4: "Short burn of the century comin soon. Flamethrowers should arrive just in time."
Musk's Aug. 7 tweet cost investors betting against Tesla about $1.3 billion, according to estimates from financial technology and analytics firm S3 Partners. If federal investigators find that Musk was intentionally trying to cost them money, he could face criminal charges, securities lawyers have said.
"I believe the better path is for Tesla to remain public," Musk tweeted. Tesla's independent directors released a statement at that time saying they fully supported Musk.
The Saudi fund has since decided to instead invest $1 billion in rival Lucid Motors, Reuters reported Monday.
Securities lawyers have previously said his off-the-cuff comments will likely draw fines from the SEC for the company and exposed Musk to possible criminal charges.
Nicole Navas Oxman, a spokeswoman for the Justice Department, said the agency doesn't "confirm, deny or otherwise comment on the existence or non-existence of an investigation."
At issue is rule 14e-8 of the Securities Exchange Act of 1934, in addition to the usual securities fraud rules.
That regulation is the primary one Musk may have violated with his nonchalant tweet that he was thinking about taking the company private and had "funding secured," securities lawyers say.
The SEC's rule 14e-8 basically prohibits publicly traded companies from announcing plans to buy or sell securities if executives don't intend to follow through, don't have the means to complete the deal or are flat out trying to manipulate the stock price.
CNBC's Phil LeBeau and Bria Cousins contributed to this article.