Tesla becomes world’s second most valuable car maker at $100bn
Tesla’s market capitalisation soared past the $100bn mark today as shares rallied, making it the world’s second most valuable car maker and putting chief executive Elon Musk in line for a big payday.
Tesla shares have risen more than eight per cent today to hit an intra-day high of $594.48, pushing its market capitalisation up to $106bn — more than General Motors and Ford combined.
A compensation scheme approved by the Tesla board in 2018 for Musk could net him a sizeable payout if the rally continues. Tesla’s market value must stay above $100bn for both a one-month and six-month average, after which Musk would earn the first tranche of stock options at around $346m.
The plan increases up to the value of $55bn across 12 tranches, should Tesla maintain its success over the next decade.
The tech billionaire, who is also the chief executive of Space X and hyperloop startup The Boring Company, currently takes no salary from his role at Tesla and owns a stake of around 20 per cent in the electric car maker.
The share price jump puts Volkswagen in third place with a market capitalisation of $90bn, while Toyota is miles ahead at $200bn.
Tesla’s share price has more than doubled over the last three months, following strong car delivery numbers and the opening of its first gigafactory in China. The firm’s full-year results for 2019 are expected next week.
“Really the gains in the share price are just about more investors betting on the brilliance of Elon Musk and a big future for electric vehicles,” said Jasper Lawler, head of research at London Capital Group.
US President Donald Trump called Musk a “great genius” at the World Economic Forum in Davos today, adding that he “does good at rockets”.
“You know, we have to protect Thomas Edison and we have to protect all of these people that came up with originally the light bulb and the wheel and all of these things. And he’s one of our very smart people and we want to cherish those people,” the President said in an interview with CNBC.
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