Elon Musk tweets he has funding to take Tesla private

Early on Tuesday afternoon, Elon Musk's official Twitter account sent a tweet suggesting that Musk was going to lead a private buy-out of Tesla's stock for $420 per share.

"It's not easy to take a company that's losing money private", Galloway said. He said is considering taking the company private at $420 a share and already has secured funding. They were initially driven higher after the Financial Times reported Saudi Arabia has quietly built a big stake in Tesla.

- CBS News' Jillian Harding contributed reporting. Shares climbed about 2% on Tuesday, and then soared after Musk tweeted.

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Tesla went public in 2010, when it offered more than 13 million shares at $17 each. Musk owns almost 20pc of the company.

The U.S. 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. If Musk were to make good on his tweet, it is unclear from where he could secure funding to buy out Tesla's shareholders.

Musk's tweet came two weeks after Tesla revealed it had burned through $739.5 million in cash on its way to a record $717.5 million net loss in the second quarter, as it cranked out more electric cars. The tweet prompted questions about how serious Musk's intentions were. Shares are up as high as 9% on the day.

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