Going private is one way to avoid the intense scrutiny of public markets. Musk has had feuds with regulators,critics and reporters,and questions remain about Tesla's production and manufacturing difficulties,long-term demand for its cars and uncertainty over funding.

"Musk does not want to run a public company,"said Gene Munster of Loup Ventures,as Tesla's ambitious mission makes it"difficult to accommodate investors'quarterly expectations."

Musk owns nearly 20 per cent of 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.

"Our guess is there is a one-in-three chance he can actually pull this off and bring Tesla private,"Munster said."The 16 per cent premium to the current share price may not be high enough to incentivise existing shareholders to support the sale."

Musk tweeted that he hoped all current investors would remain were the company to go private.

"Would create special purpose fund enabling anyone to stay with Tesla. Already do this with Fidelity’s SpaceX investment,"Musk tweeted,referring to the private space launch company Musk also runs.

'I think he's serious'

The US Securities and Exchange Commission allows companies to use social media outlets like Facebook and Twitter to announce key information in compliance with its fair disclosure rules so long as investors have been alerted about which social media outlets will be used to disseminate such information.

The SEC did not immediately respond to a request for comment on Musk's tweet.

Despite the unconventional method of disclosing such information,analysts took Musk at his word.

"I believe Tesla considers Tweets as public disclosure. I think he's serious. Plus this is short squeeze rocket fuel after a nice quarter,"said analyst Chaim Siegel from Elazar Advisors.

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.

Short interest in Tesla on Tuesday stood at nearly $US13 billion,according to S3 Partners,a financial analytics firm.

"I can't believe this is something to bluff or make fun of,"said George Galliers of Evercore ISI.

"Given his historic frustration with short sellers,analysts and certain parts of the press,it is perhaps also not surprising that he has given consideration to taking the company private."

Earlier on Tuesday,a source familiar with the matter said Saudi Arabia's sovereign wealth fund,Public Investment Fund,had bought a minority stake of just below 5 per cent in Tesla. The Financial Times earlier reported the investment.

Reuters,Bloomberg,Washington Post