It's been an afternoon of terror for traders betting against Tesla

Elon Musk tweet 'Am considering taking Tesla private at $420. Funding secured'

Elon Musk is the chairman and CEO of Tesla

Shares of Tesla were halted in afternoon trading on Tuesday after CEO Elon Musk tweeted that he's considering taking the electric auto company private at $420 a share.

At $420 per share, it would cost about $71 billion to take Tesla private.

Tesla CEO Elon Musk says he is considering taking the electric vehicle maker private.

Forward-looking: Taking Tesla private could solve a lot of headaches for Musk but it wouldn't be cheap.

"In 2013, the SEC made it clear that people could use social media to disclose significant information about their companies, but they had a caveat, which is people need to know where to look", Pitt said.

The stock was halted at $367 a share shortly after 2 p.m. (ET), as some grew concerned that Musk's tweets were an attempt at market manipulation.

Or part of a conspiracy to save a failing company as the FUD headlines are exalting, sidestepping the responsibility that comes with owning a public company?

If Musk decides against going private, Gordon said his credibility could take another hit, though one he could weather.

A deal at $420 per share represents a 22.8pc premium to Tesla's closing price on Monday, valuing the company at about $72bn.

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On April 1, amid rising market concerns about a cash crunch at Tesla, he tweeted an email announcing that Tesla would have to file for bankruptcy.

Musk has cut a controversial figure on social media and beyond, apologising last month for calling British caver Vernon Unsworth, who helped rescue 12 Thai boys from a cave a "pedo", short for paedophile, after Unsworth spoke dismissively of the Tesla chief's proposal for bringing the boys to safety.

Since Tesla is also the most shorted stock in history, Musk said the company's doubters have incentive to bash the company and depress the company's share price.

Musk's tweets, though, might present a bigger problem. Will be way smoother & less disruptive as a private company.

Mr Musk has previously discussed the drawbacks of being a public company, saying shareholder demands often produce short-term thinking.

Musk and his luxury automaker have been under enormous pressure to overcome repeated delays and deliver on promises of producing 5,000 of Tesla's more affordable Model 3 cars per week. "Plus this is short squeeze rocket fuel after a nice quarter", said analyst Chaim Siegel from Elazar Advisors.

The number of shares borrowed to sell the stock short stands at 33.8 million shares, according to data compiled by IHS Markit, meaning that Musk's tweet alone sent a $US783 million shock through the bear patch. Per CNBC, no major Wall Street banks have committed to finance a deal to take Tesla private, though a Financial Times report even earlier Tuesday suggests Saudi Arabia might have the gumption ― and the means ― to make it happen.

"Details, structure, participants and how the valuation has been determined remain to be seen".

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