Tesla has a market value of $58 billion (€50 billion) as of Monday's close, and Musk himself owns almost 20 percent of the company. Even as the world's 31st-richest person and Tesla's largest shareholder, Musk would be reliant on outside funding for any buyout since his fortune is highly illiquid. Taking Tesla out at $420 would make that promise true, and put Tesla's funding under less scrutiny. His "funding secured" comment was "very specific", said Pitt. Reuters reported the stake was "at just below 5 percent".
Tesla is the most shorted company on Wall Street.
VideoJamie Albertine, Consumer Edge Research senior automotive analyst, discusses Tesla Inc.
Tesla CEO Elon Musk shocked investors when he tweeted to his 22.3 million followers on Tuesday suggesting the electric vehicle maker could go private at $420 per share, while noting, "funding secured".
Mr Musk also previously used his Twitter account to joke that Tesla was going bankrupt in an April Fool's Day tweet and his stability was called into question last month after he called a British diver who helped rescue children from a Thailand cave a paedophile.
Whether Musk's tweet was ethically proper or not, all of the experts interviewed by FOX Business agree the move was unprofessional at best. Whether he meant to do that or not, his tweet certainly had that effect: By the time trading halted, Tesla's market value had soared to $61.74 billion, a significant raise from its pre-tweet $58 billion.
Camera IconTesla boss Elon Musk with the new Roadster. "This is not how you do it and it makes you wonder how seriously to take it", said Erik Gordon, a business and law professor at the University of MI.
Soros Fund Management LLC took a $35 million stake in the 2019 Tesla convertible bonds in May of 2018.
Camera IconTesla's existing shareholders could be given the option of retaining a stake in the company through a special fund.
The plan would need shareholder approval, but Musk's tweet sent Tesla stock spiking by nearly 9%.
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Shares climbed more than 7 per cent before the Nasdaq suspended trading pending a formal announcement.
The stock was trading at about $342 when Musk hit the Tweet button.
For some watchers, the news that Musk is considering whether to take Tesla private may not come as a huge surprise, given the CEO's often fraught relationship with Wall Street.
Making money has proven elusive for Tesla while it has been investing in electric auto technology and ramping up production of its vehicles, including a sedan with a starting price of $US35,000 to appeal to a broader audience. This is not to say that it will make sense for Tesla to be private over the long-term.
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'".
Tesla shares have been on the upswing since it reported on August 1 a bigger-than-expected second-quarter but signalled that it expects to reach profitability in the third quarter and remain in the black for the foreseeable future.
Shares have rallied strongly since those earnings, but Musk has continued to show a short fuse towards critics, lambasting "short" sellers of Tesla shares - those who take bets that the stock will fall in value. 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. Here are a few things he gains by taking Tesla private. He added that "being public means that there are large numbers of people who have the incentive to attack the company".
But as Musk pointed out on Twitter, all of this is contingent on shareholders agreeing to go private in a vote.
When another person tweeted that going private "saves a lot of headaches", Musk replied, "Yes". "People will shake their heads and say, 'that's Elon"'.