Tesla stock insanity: up 21% a day, well above Bitcoin’s record

At the beginning of August last year, when Bitcoin once surprised everyone by up to 20% in one day, yesterday was even more amazing when that record increase was broken by another famous stock.

On Tuesday, Tesla shares set a new record as it rose 21% in one day, bringing its share price to over 940 USD for the first time. So far, Tesla’s market capitalization is double that of early 2020 and four times higher than the end of September last year.

It is not yet clear what makes this magical rally of Tesla stock. Last week, the company announced an unattractive profit, only $ 105 million in the fourth quarter of 2019. Although some Wall Street analysts have raised their target prices for Tesla shares in last week, but clearly the last record increase completely out of all their forecasts.

Now Tesla is a company worth more than $ 170 billion – a huge sum for the small number of cars they ship.

Throughout the year 2019, Tesla delivered 367,500 cars. At the same time, GM sold 20 times more cars, while the market capitalization of the aging automaker was still around $ 50 billion – just one-third of the current market capitalization. by Tesla. Now Tesla is valued only behind Toyota but higher than Ford, Volkswagen and some other famous car manufacturers.

The reason for this could be simple: investors believe that Tesla will grow faster than other carmakers – and can enjoy even higher profits. Tesla currently holds a large share of the small electric car market.

So optimists into Tesla are betting that the electric car market will grow to a much larger scale in the future, with Tesla still the dominant player. This led to the prediction that Tesla could easily sell millions of cars every year by the end of this decade. Obviously only time will tell if this is true or not.

Meanwhile, the record increase of Tesla shares also helped founder Elon Musk receive huge bonuses by stock options. Under a performance-based bonus deal in 2018, Musk will get a stock option of up to 1% of Tesla’s shares if the company value is above $ 100 billion – something he did last month. . Musk will get another 1% if Tesla’s value exceeds $ 150 billion – and that happened in the last trading day.

However, that reward will not come right now. Musk will only receive the stock bonus if Tesla’s surprisingly high value is maintained for 6 months. Musk also has to meet some sales and profit targets, but the company says it has already reached those milestones.

These options were established at the time of Tesla stock price of $ 350, so at the current level of $ 900, these two stock options would bring the total value to more than $ 1 billion. Musk is also Tesla’s largest shareholder so his wealth will increase by billions more thanks to the stock’s momentum. Forbes is estimating Musk’s fortune at more than $ 40 billion.

Refer to Arstechnica