Tesla’s Market Cap Exceeds $500 Billion as Musk Becomes the Second-Richest Person in the World

By Mariliana Fotopoulou Wednesday, November 25, 2020

Tesla’s market capitalization broke above $500 billion for the first time on Tuesday after its stock hit $527.48 per share. A surge in the carmaker’s stock pushed Elon Musk to become the second-richest person in the world, overtaking Bill Gates.

A Rapid Rise in Tesla Stock Price

Tesla’s stock closed yesterday’s trading at $555.38 per share or 6.4% in the green. The stock had an incredible performance this year, with its price per share surging more than fivefold to reflect the carmaker’s drive for growth.

The company became the first $100 billion publicly listed American car manufacturer at the start of the year. When it reported Q3 earnings, Tesla posted revenue of $8.77 billion and said it shipped a record 139,300 vehicles during the quarter.

Tesla’s stock received another major boost when it was announced that it is set to become a part of the S&P 500 index on December 21, as fund managers that track the index will have to purchase Tesla’s stock.

Furthermore, investment banking company Morgan Stanley upgraded Tesla’s stock to overweight last week.

“To only value Tesla on car sales alone ignores the multiple businesses embedded within the company, and ignores the long term value creation arising from monetizing Tesla's core strengths, driven by best in class software and ancillary services," analysts wrote in a note.

Musk Becomes the Second-Richest Person in the World

A surge in the carmaker’s stock pushed Elon Musk to become the second-richest person in the world, overtaking Bill Gates. Musk is now the second-richest person in the world after Jeff Bezos, according to the Bloomberg Billionaire Index, which displays the wealthiest 500 people around the globe.

Musk’s net worth jumped $7.2 billion to $128 billion on Monday after the company announced that its stock would join the S&P 500 index in mid-December. Back in January this year, Musk was ranked 35th among the world’s richest people before his net worth surged by $100.3 billion year-to-date.

In only two weeks, Musk overtook Mark Zuckerberg and Bill Gates to become the world’s second-wealthiest person. Musk is now trailing Amazon’s Jeff Bezos, who became the richest person on the globe in 2017.

This is only the second time Bill Gates hasn’t been ranked among the top two in the last eight years. However, it should be pointed out that Gates is a known philanthropist and since 2006 has donated more than $27 billion to the Bill and Melinda Gates Foundation, the largest private foundation in the world.

People tracked by Bloomberg Billionaire Index have moved up by 23%, or $1.3 trillion, when it comes to their net worth, following massive layoffs in their companies as a result of the coronavirus pandemic.

New Models in the Pipeline

Musk gave hints that Tesla could roll out a new hatchback model in Europe sometime in the near future.

At the moment, the carmaker sells two SUVs, including Model Y and Model X, in addition to the Model S and Model 3 sedan. On the other hand, the carmaker doesn’t produce any vehicles that are a similar size to Volkswagen Golf or a Mini Cooper.

“In Europe, I think it would make sense to do I guess a compact car – perhaps a hatchback or something like that. Something that answers ‘what do most people want?’ in a given region. In the US, cars tend to be bigger for personal taste reasons and in Europe, it tends to be smaller. If you try to park in dense urban environments, having a car that fits in tight parking spaces is important,” he said.

Summary

Electric vehicle maker Tesla’s market cap reached over $500 billion for the first time as the company’s stock attained a price per share of $527.48. Tesla’s stock was largely boosted by the news that the carmaker will be joining the S&P 500 index in December, making its founder Elon Musk the second-richest person in the world behind Amazon CEO Jeff Bezos.

About the Author


Headshot for author Mariliana Fotopoulou

Mariliana has an MSC in consumer analytics and business strategy. She has a special interest in fast-moving industries and big data.

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