Tesla shares rise as Musk takes a back seat and Morgan Stanley joins the rumoured Tesla adviser list

Tesla's share price rose as much as five per cent in early trading today after Morgan Stanley hinted at its possible involvement in discussions surrounding a transaction to take the company private.

The brokerage today removed its rating and suspended equity coverage on Tesla, signalling a potential move to join Goldman Sachs as an adviser to Tesla on the deal.

The bank's website showed Tesla had been moved from "equal weight" to "not rated", with no further details provided. Goldman Sachs conducted a similar move last week, shortly before confirming its connection to the carmaker.

Tesla's share price rose to a high of $324.79, counteracting yesterday's almost three-month low after JP Morgan slashed its target price for the company from $308 to $195. Analyst Ryan Brinkman said it no longer believed Tesla boss Elon Musk's statement which said he had "secured" funding for such a transaction.

Read more: Tesla short-sellers have the last laugh

Morgan Stanley declined to comment on the move.

The news comes after Musk sent out a now infamous tweet on 7 August to say he is considering taking the electric car firm private at $420 per share, with funding secured. He later suggested such funding would come from the Saudi Arabian Public Investment Fund.

Tesla's share price rose as much as 10 per cent immediately after the tweet, but lost those gains soon after and was down nearly 17 per cent since 8 August at Monday's close.

The tweet itself now sits at the centre of several lawsuits and an investigation by the US markets regulator into whether the Tesla billionaire orchestrated the ensuing share price fiasco in a bid to hurt short-sellers.

Read more: Tesla shares fall as analysts cast doubt on Model 3 profitability

Meanwhile Musk deleted his Instagram account last night amid an unusually quiet period on Twitter for the entrepreneur.

It was revealed last week that Tesla's board had attempted to place Musk under tweet arrest in a bid to prevent him from causing further havoc with the market or affecting ongoing investigations.