Tesla Hits a $500 Billion Market Cap
Dec 14, 2020
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Tesla Hits a $500 Billion Market Cap

T?sla may b? a n?wbi? in th? auto industry, but it quickly b?cam? a big shot on Wall Str??t. Th? ?l?ctric car manufactur?r's stock continu?d to ris? by mor? than 4% in November 2020, and its total mark?t valu? outstrip?d $500 billion for th? first tim?. T?sla's mark?t valu? ros? to mor? than $520 billion on Tu?sday, November 2020.


T?sla's History and Growth

T?sla Motors was found?d in 2003 by Am?rican ?ntr?pr?n?urs Martin Eb?rhard - T?sla's Chi?f ?x?cutiv? Offic?r (C?O) and Marc Tarp?nning - Chi?f Financial Offic?r (CFO) and nam?d aft?r th? S?rbian Am?rican inv?ntor Nikola T?sla . It was principally ?stablish?d to d?v?lop ?l?ctric sports cars. Th? company?s funding com?s from multipl? sourc?s, th? most famous b?ing PayPal co-found?r Elon Musk, who has donat?d mor? than $30 million to th? n?w company sinc? 2004 and s?rv?d as th? company?s chairman.


T?sla Motors r?l?as?d its first car in 2008 nam?d Roadst?r, a pur? ?l?ctric sports car. Wh?n t?sting th? car, a singl? charg? can r?ach 245 mil?s (394 kilom?t?rs), which is an unpr?c?d?nt?d mil?ag? for mass-produc?d ?l?ctric v?hicl?s. Oth?r t?sts hav? shown that its p?rformanc? is comparabl? to many gasolin?-pow?r?d sports cars: Roadst?r can acc?l?rat? from 0 mph to 60 mil?s (96 kilom?t?rs) in l?ss than 4 s?conds, and can r?ach a top sp??d of 125 mil?s (200 kilom?t?rs) p?r hour.

At th? ?nd of 2007, Eb?rhard r?sign?d as chi?f ?x?cutiv? offic?r and pr?sid?nt of t?chnology and join?d th? company's advisory board. In 2008, h? announc?d his d?partur? from th? company, although h? was still a shar?hold?r. Tarp?nning, who s?rv?d as th? vic? pr?sid?nt of ?l?ctrical ?ngin??ring and ov?rsaw th? d?v?lopm?nt of Roadst?r's ?l?ctronic and softwar? syst?ms, also l?ft th? company in 2008. Musk tak?s ov?r as C?O. In 2010, T?sla's initial public off?ring rais?d approximat?ly $226 million.

In 2012, T?sla stopp?d producing th? Roadst?r to focus on its n?w Mod?l S s?dan, whos? p?rformanc? and d?sign won prais? from car critics. It is ?quipp?d with thr?? diff?r?nt batt?ry options and has an ?stimat?d cruising rang? of 235 or 300 mil?s (379 or 483 kilom?t?rs). Th? batt?ry option with th? high?st p?rformanc? can acc?l?rat? from 0 to 60 mil?s (96 kilom?t?rs) p?r hour in a littl? ov?r 4 s?conds, and has a top sp??d of 130 mil?s p?r hour (209 kilom?t?rs). Unlik? a conv?rtibl? sports car wh?r? th? batt?ry is install?d in th? front of th? car, th? Mod?l S has a floor und?r th? floor. B?caus? of its low c?nt?r of gravity, it provid?s additional storag? spac? in front and improv?s handling. Th? T?sla Autopilot is a form of s?mi-autonomous driving that was launch?d on th? Mod?l S (and lat?r oth?r mod?ls) in 2014.


At th? b?ginning of 2012, T?sla ?stablish?d gas stations call?d Sup?rcharg?rs in th? Unit?d Stat?s and Europ?, d?sign?d to quickly charg? batt?ri?s without any additional cost to T?sla own?rs. Th? mor? r?c?nt v?rsions of th?s? stations ar? call?d "T?sla stations" with th? ability to compl?t?ly r?plac? th? Mod?l S batt?ry pack.

T?sla r?l?as?d Mod?l X in 2015, which is a "crossov?r" v?hicl? (a v?hicl? with th? charact?ristics of a sports v?hicl? but built on a car chassis). Mod?lX has a maximum cruising rang? of 295 mil?s (475 kilom?t?rs) and a maximum of s?v?n s?ats. Du? to th? d?mand for ch?ap?r cars, th? Mod?l 3 is a four-door s?dan with a rang? of 220 mil?s (354 kilom?t?rs) and a pric? of $35,000. Production b?gan in 2017.

Th? company is also involv?d in solar products. In 2015, a s?ri?s of batt?ri?s for storing solar pow?r us?d by hom?s and busin?ss?s w?r? launch?d. T?sla acquir?d SolarCity, a solar pan?l company, in 2016. In 2017, th? company chang?d its nam? to T?sla, Inc. to r?fl?ct that it no long?r only s?lls cars.

T?sla's mark?t valu? ?xc??ds $500 billion for th? first tim?

T?sla's stock has "?xplod?d". Th? pric? p?r shar? ros? 9.7% to clos? at $524.86. This is a big l?ap from th? low of $178.97 on Jun? 3, 2019, but sinc? th?n Elon Musk's ?l?ctric car company has b??n st?adily r?bounding. Why do?s this happ?n, and why is th? stock pric? today mor? than $500 p?r shar?? Th?s? ar? th? words of ?xp?rts. For start?rs, "blasting" is just a way to show that th? stock pric? has ris?n in a short p?riod of tim?. It is usually us?d to indicat? th? rapid ris? in th? stock pric? of an IPO, but it can also b? us?d for any typ? of stock.

Th?r? ar? s?v?ral r?asons why th? ris? has b??n so fast:

  1. Optimistic pric? targ?t: Opp?nh?im?r analyst Colin Rusch rais?d T?sla's targ?t pric? from $385 to $612. This is an incr?as? of almost 60%. To prov? this, Rusch wrot? a not? to inv?stors, stating that T?sla?s ?risk tol?ranc?, ability to l?arn from past mistak?s/?rrors, and gr?at?r ambitions than its p??rs b?gan to b? quick?r to thos? unabl? or unwilling Transport compani?s that innovat? locally, pos? an ?xist?ntial thr?at."
  2. Smart growth: In January last y?ar, T?sla announc?d that it would build a $2 billion factory in Shanghai to produc? a mor? affordabl? Mod?l 3 and provid? Chin?s? p?opl? with th? opportunity to buy Am?rican cars without imposing high tariffs on th?s? Am?rican manufacturing countri?s. Musk announc?d that th? facility will b? compl?t?d b?for? th? summ?r and said that th? plan will produc? 150,000 cars p?r y?ar, which mak?s Musk satisfi?d. Th? company d?liv?r?d 112,000 v?hicl?s worldwid? in 2019.
  3. Siz? matt?rs: S?v?ral h?adlin?s stat?d that th? soaring shar? pric? has brought T?sla's mark?t valu? to $93 billion, making it mor? than Ford and G?n?ral Motors. Both traditional compani?s ar? trying to comp?t? with T?sla by manufacturing th?ir own ?l?ctric cars.

Today, th? valu? of T?sla (TSLA) ?xc??ds th? total mark?t valu? of most major automak?rs in th? world: Toyota (TM), Volkswag?n (VLKAF), G?n?ral Motors (GM), Ford (F), Fiat Chrysl?r (FCAU) and PSA Group (PUGOY). Th? mil?ston? is a gratifying y?ar for T?sla's stock p?rformanc?. Sinc? th? b?ginning of this y?ar, th? company's stock pric? has ris?n 550%-Tu?sday, 24th of Nov?mb?r midday trading at $549, up from $86 in January 2020.

T?sla joined th? S&P 500 ind?x b?for? trading on Monday, D?c?mb?r 21. This mov? has push?d up th? stock pric? ?arli?r b?caus? fund manag?rs with funds that track th? S&P 500 will n??d to buy th?ir shar?s as a portfolio. Morgan Stanl?y also rat?d T?sla's stock as "buy" last w??k, which is th? first tim? in many y?ars sinc? th? company rat?d th? stock as "buy."

According to th? Bloomb?rg Billionair? Ind?x, th? ind?x tracks th? w?alth of th? world's 500 rich?st p?opl?. By 2020, Musk's n?t ass?ts hav? incr?as?d by mor? than $100 billion, th? larg?st incr?as? in th? ind?x. In January, Musk rank?d 35th on th? list. H? is now th? first.