Tesla boss Elon Musk was the 35th richest person in the world at the beginning of 2020, but the 49-year-old South African is now at the top of the Bloomberg billionaires index following a 4.8% rise in Tesla’s share price earlier this week. He was briefly the second richest man in November last year.
According to a Bloomberg report, Musk’s net worth hit US$195 billion (RM788 billion), making him US$9.5 billion (RM6.06 billion) richer than Amazon CEO Jeff Bezos, who had held the top spot since October 2017. “How strange,” Musk said on Twitter, followed by another tweet that said “Well, back to work…”
The surge began on November 16 last year when it was announced Tesla would join the S&P 500 benchmark. In the two weeks that followed, Tesla shares skyrocketed over 30% with a market capitalisation of USD$519 billion (RM2.1 trillion). It exceeded USD$700 billion (RM2.83 trillion) for the first time this week, making Tesla worth more than Toyota, Volkswagen, Hyundai, GM and Ford combined. Toyota president Akio Toyoda recently said Tesla is not a real automaker despite its valuation – read that, here.
The news coincides with Tesla’s all-time best performance in terms of sales, with 499,550 units shifted globally. That’s only a whisker away from hitting its half-million sales target for 2020, though it’s worth noting that it managed to produce 509,737 vehicles.
While selling far less cars compared to conventional automakers, Tesla fans have been quick to suggest that the company’s meteoric rise on the stock market has more to do with its future potential than the current sales volume. However, there are also fears that Tesla’s share prices are rising far above real values, and the bubble may burst in a “spectacular fashion.”
Asset management firm GMO co-founder, Jeremy Grantham said the current investor behaviour “bore the hallmarks” of the mood in the run-up to the 1929 Wall Street crash. “I believe this event will be recorded as one of the great bubbles of financial history, right along with the South Sea bubble, 1929 and 2000,” Grantham wrote in a letter to clients. He has been credited with calling the market peak in 2008.
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