Upon the news, Tesla stock quickly shot up to $365, climbing toward $420 - the amount Musk noted would be the trigger price.
He said he was thinking about taking the electric vehicle company private, and already had the funding lined up. However, Musk expects the shareholders to agree with him and allow him to take the company private again.
[T] he reason for doing this is all about creating the environment for Tesla to operate best.
Despite its challenges, Tesla has remained a favorite 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. The stock rallied 11% on the day, burning short sellers, who Musk has publicly blasted, to the tune of $1.32 billion per S3 Partners and sending many investors scrambling.More news: Premier Doug Ford announces buck-a-beer launching in Ontario this month
A deal at $420 per share represents a 22.8pc premium to Tesla's closing price on Monday, valuing the company at about $72bn. SpaceX is a flawless example: it is far more operationally efficient, and that is largely due to the fact that it is privately held. He cited SpaceX as an example and said it is "far more operationally efficient" because it is a private company.
Mr Musk has been under intense pressure this year to prove he can deliver on his promise to turn his money-losing company into a profitable higher-volume manufacturer.
A short squeeze is a trading scenario that occurs from time to time in heavily shorted stocks, when bearish traders are forced to buy shares to avoid big losses - something that ends up pushing the stock only higher.
The stock had already been heading upwards after news about a Saudi Arabian fund with a large (about 3 to 5 percent) stake in the electric auto company.
First, I would like to structure this so that all shareholders have a choice. He went on to say he hopes all shareholders stick with the company but, if not, this is their time to exit while still making a "nice premium".More news: Cleaning crew finds dead baby on American Airlines plane
Tesla did not return repeated calls for comment from CNBC, nor did the Securities and Exchange Commission, as of this publishing. If we were to go private, employees would still be able to periodically sell their shares and exercise their options.
Third, the intention is not to merge SpaceX and Tesla.
He shared more details in a series of Twitter replies, noting that should Tesla go private, he'd remain in his role as founder and CEO of Tesla. He responded to one user who observed that going private would save Tesla "a lot of headaches".
Musk also denied giving donations to a political action committee dedicated to helping the Republicans maintain control of the house. Either way, the future is very bright and we'll keep fighting to achieve our mission.More news: German couple convicted of rape, online sale of young son