Elon Musk tweets about going private and shares 'skyrocket'

Elon Musk

Tesla stock was trading at about $355 a share before Musk's tweet.

CEO Elon Musk said on Twitter Tuesday that he's thinking about taking Tesla private, sparking a rally in the company's shares.

Taking Tesla private would be an extreme albeit effective way of muting Tesla's bears, according to Michael O'Rourke, chief market strategist at JonesTrading.

Tesla shareholder Quint Tatro, managing director of Joule Financial, praised the idea as "brilliant", adding that "Musk is exhausted of dealing with all the challenges of being 'public'".

Bullish on the performance and increased production of "Model 3" cars, Tesla CEO Elon Musk is now planning to introduce a mini-car.

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Upon the news, Tesla stock quickly shot up to $365, climbing toward $420 - the amount Musk noted would be the trigger price.

If Tesla went private, investors could keep their stakes in Tesla through a special fund, or sell their shares at $420 United States dollars. That would put pressure on Tesla while it continues to burn cash, as of the second quarter.

Tesla Motors started selling its stock to the public in 2010 - the first initial public offering of a USA automaker in more than a half-century. He added that "being public means that there are large numbers of people who have the incentive to attack the company". "Funding secured", Musk said on Twitter, without disclosing the source of the funding.

Going private would reduce the market pressure on Tesla, especially from short sellers who believe Tesla is set up to fail and are pursuing strategies to profit from Tesla's troubles. He also suggested the move could only be temporary as he stated "once Tesla enters a phase of slower, more predictable growth, it will likely make sense to return to the public markets".

Munster predicted a one-in-three chance that Musk will actually take Tesla private.

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The Financial Times is reporting that Saudi's Public Investment Fund (PIF) has built a significant stake in Tesla - to the tune of between 3% and 5% of the all-electric vehicle maker's shares this year.

Musk has frequently expressed dismay at Tesla's treatment as a public company and has clashed with regulators, critics and reporters.

During a conference call in May, Mr. Musk shut down questions from analysts, calling them "boring" and spent much of the time talking to an investor who runs a YouTube channel, prompting an after-market sell-off of Tesla's shares.

"Being forced to sell at $420 in a go-private deal would be a little bit of a bummer because, although myself and all the other Tesla investors would make money at an all-time high, we'd be missing out on a long-term ride", Russell said.

Musk has a long history of bristling at the amount of scrutiny Tesla endures from investors and media.

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