Tesla Stock Over $800, Musk Now Richest Person in the World

08 Jan 2021 · 3rd Party Analysis

WRITTEN BY ThorFX

In Summary

  • Positivity characterizes key indicators
  • Tesla goes from strength to strength

Tesla shares climbed over $60, or nearly 8.00%, in Thursday’s market session as the stock market roared on stimulus bets now that the Biden presidency is confirmed. Additionally, the rally was aided by the overall positive sentiment following the cessation of the political turmoil in the US. All major US equity benchmarks reached all-time highs with Nasdaq leading the pack, rallying 2.56%, or 326 points to a historical top of 13,067. The S&P500 also reached a record high, jumping 1.48%, or 55 points to an all-time high of 3,803 points. The Dow Jones Industrial Average reached a new milestone, closing above 31,000 points for the first time in its history. It took the 30-stock index only 29 trading days to climb 1,000 points, the fastest 1,000-point move in 2 years, following the 8 days between 25,000 and 26,000 in 2018.

On Thursday, Tesla stock reached a new all-time high going above $800 and closing at $815 per share, making Tesla CEO Elon Musk the world’s wealthiest person. Mr. Musk benefited from the rise of his electric car company as he holds 20% of the shares. He netted a gain of $13.6bn on Thursday, surpassing Jeff Bezos’ wealth by $10B to reach a total net worth of $195bn. “How strange”, Elon Musk tweeted about the milestone, finishing with “Well, back to work…”

The Tesla Success Story

A year ago, Mr. Musk was worth around $27 billion while Tesla shares were hovering below $100 on a split-adjusted basis. Since then, Elon Musk, the billionaire entrepreneur, has added over $165 billion to his wealth in the past year and eclipsed Amazon’s Bezos, who has held the number one spot since 2017. The EV company led by the South-Africa born engineer has grown by more than 740% last year, posted five consecutive quarters of positive earnings, and finally in December, after going through a 5-for-1 split, was also included in the S&P500 index. The inclusion, which initially prompted a sell-off in the first couple of days, was cheered by investors who uplifted the stock and continued on their way to a buying spree that is still ongoing.

Currently, Tesla’s market value has grown to over $770 billion. The EV maker has effectively elbowed Facebook to the side to become the fifth most valuable company in the S&P500. Facebook’s market cap currently stands at $765 billion. Tesla has added roughly $105 billion to its market value this week, while Elon Musk has increased his wealth by over $25 billion year-to-date, essentially four trading days.

Recently, Tesla has been benefiting from a set of events and developments. The latest jump in Tesla share price came after Morgan Stanley lifted the target price on Tesla to $810 from $540. While Amazon stock has remained relatively flat as the market expects Washington to increase regulations for the company, Tesla benefited from the democratic sweep that will allow President-elect Biden to enact his policies more easily now that he has a Democrat-controlled Senate. Joe Biden’s plans and legislative agenda will prioritize clean-energy policies, which is seen as a very bullish sign for Tesla and the overall EV sector.

Looking at the broader picture, 2020 was a year that led to the loss of millions of jobs being lost as a result of the pandemic, but it was also responsible for the accumulation of $1.8t by the wealthiest 500 people in the world. In 2020, Mr. Musk moved from being outside the top 50 wealthiest people to second place, only to pass Mr. Bezos in the first week of 2021.

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