While no final decision has been made, he suggested a buyout price of $420 per share.
Soros Fund Management LLC took a $35 million stake in the 2019 Tesla convertible bonds in May of 2018. It has lost money on an operating basis every year since it went public and it's been burning through billions of dollars as it's ironed out production issues with its Model 3 sedan. "There is a 1 in 3 chance he can actually pull this off and bring Tesla private", said Munster, adding that even at a market capitalization based on a $420 share price, it "may not be high enough to incentivize existing shareholders to support the sale".
Musk detailed his proposal in a blog post on the company's website Tuesday, hours after stunning the company's followers by casually tweeting that he might take it private.
At $420 per share, a deal would represent a 23 percent premium to Tesla's closing price on Monday.
Despite its challenges, Tesla has remained a favourite among many investors, partly due to their faith in Mr Musk, who made his initial fortune as a co- founder of PayPal and also is the chief executive of a trail-blazing aerospace company, SpaceX, that's already private. Intentions to buy out public shareholders usually need to be filed with the Securities and Exchange Commission, or SEC.
Musk tweets he may take Tesla private and shares roar
Tesla CEO Elon Musk says he is considering taking the electric auto maker private. Tesla did not respond to a request for comment immediately.
Musk also owns about 10 percent of Space X, which is valued at $25 billion and a large portion of The Boring Company, which analysts have said could reach $16 billion in value if it executes on current contracts. Additionally, the Tesla bull weighed in on the likelihood of Musk taking the company private.
But earlier in the day, the Financial Times reported that Saudi Arabia's sovereign wealth fund, overseen by Crown Prince Mohammed bin Salman, has built an undisclosed stake of between 3 and 5 percent stake in Tesla.
Tesla has been publicly traded since 2010, and has seen its share price rise from just under $20 then to $360 at time of writing.
Going private would reduce the market pressure on Tesla, especially from short sellers who believe Tesla is set up to fail and are pursuing strategies to profit from Tesla's troubles.
"Once Tesla enters a phase of slower, more-predictable growth, it will likely make sense to return to the public markets", he wrote. Mr Musk's offer is 9 per cent higher than Tesla's peak closing price of $US385 reached almost a year ago. Factoring in $US8.8 billion ($11.9 billion) in debt, Musk's ganja-friendly target price to go private would value the company at around $US80 billion ($107.8 billion).
And yet it also left many questions unanswered, namely how Musk - who owns nearly 20 percent of the company - would be able to come up with the $66 billion necessary to complete the transaction.