If Tesla went private, investors could keep their stakes in Tesla through a special fund, or sell their shares at $420 United States dollars.
The stock was trading at about $342 when Musk hit the Tweet button.
The billionaire Musk, who owns about 20 per cent of the company, said a transaction would not "substantially" alter his stake and that he expected to continue to lead the company if it occurred.
At that price, the Tesla transaction would be worth more than US$71 billion.
When asked on Twitter whether he was serious, Musk replied: "Yes.It saves a lot of headaches".
In July, Model 3 - that comes with a base price tag of $35,000 - not only had the top market share position in its segment in the U.S., but it also outsold all other mid-sized premium sedans combined - accounting for 52 per cent of the segment overall.
His tweet came hours after the Financial Times reported that Saudi Arabia's sovereign wealth fund had built a significant stake in Tesla Inc., but it was unclear if that was the funding Musk was referring to.
10 killed, 53 wounded in Chicago weekend shootings
Johnson said that both murders and shootings are down on the year, but said this weekend showed there was still a lot to do. I never hear people saying 'These individuals out here in the streets need to stop pulling the trigger.' ...
Tesla stock over the past year has traded as high as $390 per share, and as low as $245 per share.
Elon Musk has "surprised" the market by laying out a tentative plan to privatise the now publicly listed Tesla electric car/solar energy company with a $420 per share price offer.
Tesla Motors started selling its stock to the public in 2010 - the first initial public offering of a USA automaker in more than a half-century.
While Twitter users had questioned whether the $420 price was real - the number is a slang term for marijuana - he confirmed that it was about a 20 percent premium over Tesla's share price after its second-quarter earnings.
He also said he would not sell his stake.
Musk in the tweet said he is considering taking Tesla private at $420 per share, adding that funding for the potential move has already been secured.
The memo included some of the details Musk had tweeted earlier in the day; investors could stay in or be bought out at $420 a share, and shareholders would have an opportunity to sell or buy every six months. Finally, as the most shorted stock in the history of the stock market, being public means that there are large numbers of people who have the incentive to attack the company.
The plan would need shareholder approval, but Musk's tweet sent Tesla stock spiking by nearly 9%.
This is especially true for a company like Tesla that has a long-term, forward-looking mission.
But the market appeared to take him seriously with Tesla shares surging on the news. "Funding secured, ' Musk tweeted, following up with 'good morning" and a smiley emoji.