By Graham Rapier From Business Insider

Tesla spiked more than 7% Tuesday after the Financial Times reported Saudi Arabia’s investment fund had amassed a $2 billion stake in the company.
CEO Elon Musk tweeted shortly after that he was “considering taking Tesla private at $420.”
Tesla shares were halted at 2:08 pm for more news.

Trading of Tesla’s stock was halted at 2:08 pm Tuesday following a 7% surge after CEO Elon Musk tweeted that he was “considering taking Tesla private at $420,” adding that finding was “secured.”

The unprecedented tweets came just minutes after the Financial Times reported Saudi Arabia’s sovereign wealth fund had amassed a $2 billion stake in the company, which had initially catalyzed a roughly 3% jump in the stock price on Tuesday.

Saudi Arabia’s Public Investment Fund, which controls more than $250 billion in assets from decades of oil exports, now owns between three and five percent of Tesla’s outstanding stock, the FT reported. The stake is likely worth between $1.7 billion and $2.9 billion, based on on current prices.

The timing of the investment was not clear, but the FT said it likely happened during the Crown Prince Mohammed bin Salman’s tour of the US in March. The paper also reported that Tesla rejected the fund’s original offer to buy new shares in the company, and instead opted to buy them on secondary markets, with the help of JPMorgan.

A Tesla spokesperson declined to comment on the investment. A separate request for comment on Musk’s unprecedented tweet did not immediately receive a response.
In a separate tweet, Musk said he “doesn’t have a controlling vote now and wouldn’t expect any shareholder to have one if we go private.”

While the tweets aren’t necessarily illegal — companies have been allowed to make material disclosures on social media since 2013 — they did raise questions across Wall Street.

Speaking on CNBC, Harvey Pitt, former chairman of the Securities and Exchange Commission, said the tweets were “highly unprecedented” and that the move “raises significant questions about what his intent was.”

As a private company, Musk could avoid the short-sellers — or those investors betting against Tesla’s stock price — that he has very publicly feuded with. Many Tesla bears — including Wall Street behemoths like Goldman Sachs — see a new capital raise, either through debt or equity offerings, as a real need in the near future. Musk maintains the company will be profitable this year, making any cash infusion unnecessary.

“There’s a lot of noise that surrounds a public company and people are constantly commenting on the share price and value,” Musk told Bloomberg News in 2015. “Being public definitely increases the management overhead for any given enterprise.”

Shares of Tesla are up 15% since the beginning of the year.
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