Elon Musk tweets about going private and shares 'skyrocket'

The surprise announcements prompted former Securities and Exchange Commission Chairman Harvey Pitt to question whether Musk had broken securities laws.

NYU Marketing Professor Scott Galloway on Tesla CEO Elon Musk tweeting that he is considering taking the company private. "I won't be selling in either scenario".

The company's shares rose more than 7% on the news, before Tesla trading was halted.

He also tweeted that his "hope is all current investors remain with Tesla even if we're private".

The post included an email from Musk to company employees in which the billionaire tech executive said going private was "the best path forward" for Tesla.

Supporters of Musk and the company view him as a visionary akin to Apple co-founder Steve Jobs, while critics have likened him to a "Wizard of Oz" like figure who has yet to turn a profit. The automaker is also the most shorted on Wall Street, with many investors betting the company will fail. Shares jumped in Tuesday trading following reports that the Saudi Arabian sovereign wealth fund took a $2 billion stake in the company earlier this year. The CEO said shareholders would have the final say if he decides to follow through on going private, and that he would stay in his job. "We believe that the majority of Tesla's production lines will be ready to produce at this rate by the end of 2018", Musk said during the company's second quarter results last week. It's not hard to imagine the gyrations that Tesla's stock would go through if Musk's plan was scrapped or substantially changed. "Are we running low on money?"

Despite the unconventional method of disclosing such information, analysts took Musk at his word. Representatives for the Saudi fund weren't immediately available for comment on the investment, which the Financial Times first reported earlier Tuesday.

He later deleted that tweet and apologized for that exchange, but at least one analyst suggested Musk needed to get off Twitter to restore investor confidence in the company. A price of $US420 per share price would represent a 22.8 per cent premium to Tesla's closing price on Monday, which gave the company a market value of about $US58 billion. Over the weekend, he tweeted a video parody that cast Adolf Hitler as a short seller flying into a rage at Tesla's recent financial reports.

Despite its challenges, Tesla has remained a favourite among many investors, partly due to their faith in Musk, who made his initial fortune as a co-founder of PayPal and also is the CEO of a trail-blazing aerospace company, SpaceX, that's already private.

Taking Tesla private would certainly qualify.

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