Catherine Wood, founder and CEO of money management firm ARK Invest, outlined her case for a 1,200% increase in Tesla Inc. (TSLA) stock on CNBC this Tuesday, indicating that her firm is planning to send a letter “today or tomorrow” to Tesla’s board and its leader Elon Musk explaining why shares of the electric vehicle (EV) maker could skyrocket to $4,000. (See also: Tesla's True Value ‘Closer to $200’ Says Needham.)

Ark Invest, with more than $1 billion in assets under management, thinks that Musk's remarks on Twitter about taking the automaker private when the stock hits $420 would be a major loss for the company and its investors. Tesla stock has been on a roller-coaster ride in recent weeks due to a series of headlines surrounding Musk as the EV pioneer continues to push production of its first mass-market vehicle, the Model 3 sedan. Musk, who has promised to deliver the "short burn of the century," given that Tesla is the most-shorted stock in the U.S., indicated that funding had been secured for a take-private transaction. Later, shares plummeted on news that his comments were not approved by anyone else within Tesla, with some on the Street doubting the truthfulness of his statements. (See also: Apple Should Buy Tesla: Ross Gerber.)

Despite all the drama over the past few weeks, Wood indicated that her firm's "conviction has increased recently" and that the Silicon Valley company is at least three years ahead of any other automaker due to two main factors, its new chip and its advanced battery technology.

'Tesla Is Way Ahead of the Game'

Wood argued that Musk would not be able to scale the company the way he wanted to on the private market. Meanwhile, such a decision would "deprive some of his biggest fans of participating in this ride" and force Musk to show private equity monthly statements.

"Tesla is way ahead of the game," stated Wood, highlighting its over 10 billion miles of data driving that its artificial intelligence (AI) project has, which she says will take Tesla from 20% gross margins to 80% gross margins as it doubles down on Software as a Service (SaaS) and Transportation as a Service (TaaS). In the second quarter, Musk touted the firm's upcoming autopilot hardware, backed by an AI processor.

The Tesla investor also cited upside from autonomous driving technology and trucks, which she expects will transport freight more cheaply than rail. She noted that Tesla's market share has grown from a percentage in the 30s to a percentage in the 50s.