Tesla closed up 11 percent at almost $380 after trading resumed.
"The market doesn't believe him", said David Kudla, the CEO of Mainstay Capital Management, which is betting against Tesla.
"The short position is the best thing the stock has going for it. "Musk vs The Shorts" is a far better narrative than 'Tesla vs Mercedes/Audi/Porsche, '" Chanos said.
Despite its challenges, Tesla has remained a favorite among many investors, partly due to their faith in Musk, who made his initial fortune as a co-founder of PayPal and also is the CEO of a trail-blazing aerospace company, SpaceX, that's already private.
Mr. Musk took to Twitter Tuesday to announce he had lined up investors to take the automaker private at US$420 a share, a price that would value the company at more than US$70-billion.
Raging Mendocino Complex fire becomes largest in California history (VIDEOS, PHOTOS)
The two fires burning a few miles apart and known as the Mendocino Complex are being treated as one incident. The tweets baffled state officials, who quickly pointed out that water supplies are not the problem.
"Being forced to sell at $420 in a go-private deal would be a little bit of a bummer because, although myself and all the other Tesla investors would make money at an all-time high, we'd be missing out on a long-term ride", Russell said.
A spokesman for Tesla did not immediately return a request for comment. The Saudi fund approached Musk about buying new shares, was rebuffed, and instead bought the shares in secondary markets.
Gains following the tweet added to upward movement on the stock after the Financial Times reported that a Saudi Arabian sovereign wealth fund had built a stake of between three and five percent in the company.
While volume can stop trading, it's highly unlikely volume caused trading to be halted today because Tesla has historically had higher volume days than it was having on August 2, 2018. Prices seesawed in the range of $360 to $370, a roughly 7 to 8 percent rise for the day, while investors tried to decide whether Musk was joking.
Musk said he wants to take the $64 billion company private because of the "large numbers of people who have the incentive to attack the company".
Malaysia's former PM Najib to be charged with money laundering
All the charges relate to the scandal surrounding sovereign wealth fund 1MDB, which was set up and overseen by Najib. Najib, who set up and oversaw 1MDB, denies any wrongdoing.
"I would like to structure this so that all shareholders have a choice", Musk wrote.
The disclosure initially raised questions whether the eccentric Musk was joking, but he then amplified on his plan in a subsequent tweet that said he meant to create a special fund that would allow all current Tesla shareholders to retain a stake in the vehicle maker if they want.
He implied that the funding values the company at $420 a share.
No stranger to controversy, Musk last month apologized for calling British caver Vernon Unsworth, who helped rescue 12 Thai boys from a cave a "pedo", short for pedophile, after Unsworth spoke dismissively of the Tesla chief's proposal for bringing the boys to safety. Musk has vowed that the company will start turning a regular profit in the second half of this year. If the process ends the way I expect it will, a private Tesla would ultimately be an enormous opportunity for all of us.
Ohio State fans rally for Urban Meyer as job decision ticks down
Smith denied assaulting his wife and said any physical injuries she might have suffered were the result of him defending himself. Meyer released a statement Friday saying that he followed proper procedures when he found out about the 2015 abuse allegations.