It zoomed as high as $371 per share before trading was halted at $367 per share just after 2 pm EDT.
The bombshell proposal to take the electric auto maker private prompted regulators to take the unusual step early Tuesday afternoon of suspending trading in the company's stock.
Musk has also clashed repeatedly with critics, especially investors who have taken short positions on the stock, meaning they benefit when the price falls.
In an internal email, sent from Musk to Tesla employees on August 7, the CEO confirmed most of this, as he explained his thinking directly.
Tesla has burned through cash while struggling to produce the Model 3, its lowest-priced electric vehicle. The California vehicle maker has burned through US$1.8-billion in the first half of 2018 and is among the most-shorted stocks on the USA markets.
"We believe that the majority of Tesla's production lines will be ready to produce at this rate by the end of 2018", Musk said during the company's second quarter results last week.
Tesla and its investors are no stranger to seeing the company's share price follow a rollercoaster trajectory.
Trump's claims on Calif. wildfires inaccurate
State authorities responded by saying California's water supply was not "diverted" anywhere. Evan Westrup, Brown's press secretary, said Trump's tweeting "does not merit a response".
"This is especially true for a company like Tesla that has a long-term, forward-looking mission".
Tesla shares have been on the upswing since it reported on August 1 a bigger-than-expected second-quarter but signalled that it expects to reach profitability in the third quarter and remain in the black for the foreseeable future. "He originally brought Tesla public in 2010, given he could no longer personally finance its growth, and has continually expressed his frustration with the company being public".
"Being public means that there are large numbers of people who have the incentive to attack the company", he wrote.
The tweets came after a report in the Financial Times that Saudi Arabia's sovereign wealth fund had taken a 3%-5% stake in Tesla, a holding worth at least $1.9bn. If shareholders approved the deal, it would remove Tesla from Wall Street scrutiny, eliminating the need to publicly disclose its earnings and - for Musk - the requirement to explain himself to shareholders.
Mr Musk has been under intense pressure this year to prove he can deliver on his promise to turn his money-losing company into a profitable higher-volume manufacturer.
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. The company did not immediately respond to a request for comment on the likelihood that it will go private, potential timing for doing so, or the funding sources Musk referred to. But he says any deal would be structured so that shareholders could opt to remain investors or be bought out at $420 per share.
"This has nothing to do with accumulating control for myself", he said.
FILE PHOTO: Elon Musk, founder, CEO and lead designer at SpaceX and co-founder of Tesla, speaks at the International Space Station Research and Development Conference in Washington, U.S., July 19, 2017.