The world’s busiest electric car business is now worth more than Facebook.
Tesla’s share price has skyrocketed over the past year as the company has delivered five profitable quarters in a row. Its market capitalization is now about $ 830 billion, making it the fifth most valuable company on Wall Street. Only Apple, Microsoft, Amazon and Alphabet are bigger.
The rising share price of the company has a good basis in reality. Tesla has been consistently profitable since the end of 2019. It expands production with new factories in Austin, Texas and Brandenburg, Germany (although the German factory has environmental barriers). It sold nearly half a million cars in 2020 – an impressive increase compared to the 367,500 cars it sold in 2019, but still a fraction of what competitors like Ford and GM deliver each year with much smaller market capitalizations.
More immediately, Tesla’s share price benefited from the election of Joe Biden, and the result of the Senate’s run-off election in Georgia, which gives Democrats control over the White House and both chambers of Congress. This increases the likelihood that Biden will be able to implement its plans to create 1 million jobs in the US automotive industry, invest in charging stations for electric vehicles and other green energy initiatives that could benefit Tesla’s advantage.
Tesla has also benefited from a challenging optimistic stock market that has dusted off money at any company that smells bad of technology. Facebook also benefited: its share increased by 33% in 2020. But Tesla has risen much more and seen its shares rise by more than 700% over the past year – well above most analysts’ target price for the stock.
Tesla finally surpassed Facebook this week, just as the share price of the social media giant fell slightly amid fears that the United Democratic government in the US could lead to greater monopolistic investigation.
The profit is good news for Tesla’s shareholders, and one in particular: CEO Elon Musk became the new richest man in the world this week, past Jeff Bezos, CEO of Amazon.
Musk has lamented in the past the fact that he is ‘cash-poor’ because most of his wealth is tied up in company stock. Still, amid altruistic poverty to Twitter amid news of his company’s success, he said he intended to give money away.