Shares of the electric car maker were down 3.5 percent in late-morning trading at $307.82 on news that Musk could face a libel suit over the episode.
Musk attacked British diver Vern Unsworth, who had dismissed the Tesla chief’s efforts to help the rescue mission for the 12 boys as a “PR stunt” in a widely seen interview on CNN.
Musk, without providing any justification or explanation, referred to Unsworth as “pedo guy” in a since-deleted tweet on Sunday. “Pedo” is short for pedophile.
Unsworth told AFP on Monday he had not reviewed the tweets in full and had only heard about them.
But asked if he would take legal action against Musk over the allegation, Unsworth said: “If it’s what I think it is yes.”
Unsworth, who lives part of the year in Thailand, took part in the gargantuan 18-day effort to retrieve the 12 boys and their coach, a mission that ended on July 10 when the last five members were extracted.
Unsworth had dismissed an offer from Musk for a miniature submarine as useless to the mission.
The episode is the latest controversy surrounding Musk, who has occasionally rattled Wall Street with erratic behavior.
Shares were pummeled in May after Musk abruptly cut off questions from Wall Street analysts over Tesla’s spending plans.
But Musk also has many champions on Wall Street, who believe his plans for disrupting autos could remake the transportation sector and have helped Tesla achieve a market value greater than Ford and only slightly below that of General Motors.