Tesla CEO Elon Musk thinks the fraud case the SEC filed against him on Thursday is flawed, according to a report in the Wall Street Journal citing a person familiar with the matter.

Musk reportedly believes the SEC is wrong to contend that he needed a written agreement and price before sending a tweet on August 7 that said "Am considering taking Tesla private at $420. Funding secured."

Musk thinks he had a verbal agreement in place with the Saudi sovereign wealth fund, and that verbal agreements are often common when doing business in the Middle East.

The report also says that Musk told several people that he could have used his own stake in SpaceX, the commercial space flight company he founded and that is worth billions of dollars, to lead the take-private.

Read the full report in the Wall Street Journal.