The world’s hottest electric car company is now worth more than Facebook.
Tesla’s stock price skyrocketed last year, with the company delivering five consecutive profitable quarters. Its market capitalization is now around $ 830 billion, making it the fifth most valuable company on Wall Street. Only Apple, Microsoft, Amazon and Alphabet stand out.
The company’s rising share price has some basis in reality. Tesla has been consistently profitable since the end of 2019. It is expanding production with new plants in Austin, Texas and Brandenburg, Germany (although the German plant faces environmental obstacles). It sold nearly half a million cars in 2020 – an impressive increase from the 367,500 cars it sold in 2019, but still a fraction of what rivals Ford and GM deliver each year at much lower market values.
More immediately, Tesla’s stock price benefited from the election of Joe Biden and the results of the second round of the Senate in Georgia, which gave Democrats control of the White House and both chambers of Congress. This increases the likelihood that Biden will be able to implement his plans to create 1 million jobs in the U.S. auto industry, invest in electric vehicle charging stations and other green energy initiatives that could benefit Tesla’s financial results.
Tesla has also benefited from a defiantly optimistic stock market, which has squandered money on any company that smells lightly of technology. Facebook also benefited: its shares rose 33% in 2020. But Tesla gained much more, seeing its shares rise more than 700% last year – well above the target price of most analysts for the shares.
Tesla finally overtook Facebook this week, just as the share price of the social media giant fell slightly amid fears that the unified Democratic government in the U.S. could lead to further antitrust scrutiny.
The gains are good news for Tesla shareholders, and one in particular: CEO Elon Musk this week overtook Amazon boss Jeff Bezos to become the world’s richest new man.
Musk, in the past, lamented the fact that he had “little money” because most of his wealth is linked to the company’s shares. Still, the poor altruist accessed Twitter amid news of his company’s success to declare his intention to donate money.