Tesla CEO Elon Musk said Tuesday that he believes the company should go private as it grows in value in a startling development that immediately stirred an intense reaction on social media.
"Am considering taking Tesla private at $420. Funding secured," Musk tweeted at 12:48 p.m. Tuesday.
Musk, whose tweet initially caused confusion as some investors questioned whether he had been hacked, later confirmed the possible plan through Tesla's official website.
"I think this is the best path forward," he said in an email to employees, further clarifying that "a final decision has not yet been made, but the reason for doing this is all about creating the environment for Tesla to operate best."
Tesla shares were up 7.3 percent to $366.94 at 2:08 p.m. Tuesday, when Nasdaq trading on the stock was halted while awaiting Musk's clarification on his tweet.
"This would be an incredible and surprising development," said CFRA Research stock analyst Efraim Levy, who tracks Tesla.
Musk has repeatedly expressed frustration in the past over public trading on the company's stock, including investors who bet that the stock will decline.
The unexpected tweet immediately gave investors reason to weigh whether the tweet was authentic or whether, in fact, Musk's account was hacked or he meant to tweet something else.
Tesla representatives did not immediately respond to requests for comment, leading industry watchers to speculate over the nature of Musk's tweets.
But he confirmed his thinking in an email to Tesla employees that was published as a blog post.
"As a public company, we are subject to wild swings in our stock price that can be a major distraction for everyone working at Tesla, all of whom are shareholders. Being public also subjects us to the quarterly earnings cycle that puts enormous pressure on Tesla to make decisions that may be right for a given quarter, but not necessarily right for the long-term," he wrote.
"Finally, as the most shorted stock in the history of the stock market, being public means that there are large numbers of people who have the incentive to attack the company."
On Twitter, he noted that he does not control the company and wouldn't sell his shares if the company goes private.
Musk's stake in Tesla is worth about $12 billion, according to S&P Global Market Intelligence. He owns about 20 percent of the company, which is valued at about $62 billion as of Tuesday afternoon.
Investors would have a choice on whether to sell out or maintain their shares.
"My hope is for all shareholders to remain, but if they prefer to be bought out, then this would enable that to happen at a nice premium," he wrote.
The original tweet came shortly after a Financial Times report that the investment arm of Saudi Arabia has acquired a substantial stake in the electric vehicle maker.
Tesla, contacted before the Musk tweet, declined to comment on the Saudi Arabia post.
The Financial Times reported that Saudi Arabia's stake is between 3 percent and 5 percent.
The oil-rich nation has been actively trying to diversify its economy, in part by using its sovereign wealth fund to invest in alternative assets. The fund has more than $250 billion in assets.
