SAN FRANCISCO _ Trading in Tesla stock was halted Tuesday after Chief Executive Elon Musk said via Twitter that he's "considering" taking the company private at $420 a share and has the funding to do it.
Such a deal would be worth about $71 billion, a $13-billion premium over the company's market value when U.S. stock markets opened Tuesday.
A few hours after markets opened, Musk tweeted: "Am considering taking Tesla private at $420. Funding secured."
The news had jaws dropping all over Wall Street.
A tweet like Musk's is "definitely abnormal," said Efraim Levy, stock analyst at CFRA Research. "This is the Elon Musk universe and the Donald Trump universe. Tweets have taken on a new role."
"If this is true," Levy said, "it would be an incredibly surprising development."
Shares were up 7.4 percent at $367.25 shortly after 11 a.m. Pacific time, when trading was halted. Earlier it was up as much as 8.5 percent.
Tesla could not be immediately reached for comment.
Ross Gerber, chief executive at investment firm Gerber Kawasaki, which holds a stake in Tesla, told The Times that "this is legit." He said he emailed a top executive at Tesla's investor relations department who verified that Musk's tweet was real and that a deal to take the company private is in the works. He said he was told more information would be released "potentially later."
Although the stock shot up after the tweet, the fact that it hasn't come close to the $420 figure indicates many investors are waiting for more details before assuming the deal is real.
The initial tweet came shortly after the Financial Times newspaper reported that Saudi Arabia has taken a significant stake in Tesla. Because the purchase was made on the open market, the investment wouldn't produce new cash for the company.
Still, the investment _ said to be 3 percent to 5 percent of outstanding shares _ demonstrates Tesla's continuing ability to attract new investment despite its woes.
The company burned through more than $1.5 billion in cash in the year's first half, with $2.2 billion in cash remaining.
Musk said recently that the company's cash flow will be enough to fund the company going forward, but some analysts doubt Tesla's ability to post significant growth without new outside capital.
According to the Financial Times report, Saudi Arabia's sovereign wealth fund bought the shares sometime over the last several months, at a cost of around $1.7 billion.
The report said the state-run Public Investment Fund first approached Musk seeking to participate in a new issue of Tesla shares.
But Musk has said publicly he will not raise new equity or debt in 2018. The Saudi fund reportedly purchased the shares on the open market, which would have helped prop the stock price.
About half an hour after the initial tweet, Musk's account replied to a tweet by Fox Business anchor Liz Claman, who said: "So I was watching @Tesla stock one minute and the market cap was at $60B and the next it was $62B on this @elonmusk 3pET possible buyer/buyers? At what price?"
The reply in full: "420."
That number, which is associated with marijuana _ combined with the abrupt nature of the announcement _ prompted speculation about whether the announcement was serious and whether Musk's Twitter account had been compromised. But the account began replying in more detail to other tweets, saying that Musk expects to remain CEO, that he doesn't plan to sell his shares, that no entity would be a controlling shareholder, and that existing shareholders could continue to own their stakes in Tesla.
