Thursday, 7 January 2021 will be remembered in financial history. Elon Musk achieved Two major milestones yesterday. First one, he became the richest person in the world. Second, his company Tesla’s market cap became more than Facebook’s.
Reasons Behind Tesla Surge
Tesla deals in the clean energy and auto vehicles business. Both departments of Tesla is responsible for his success. Yesterday, Tesla’s share saw a remarkable jump of 4%. Share reached a value of $811.
The first major reason for Tesla’s growth is the success of electric cars. The whole world is shifting the automobile industry from oil-based to electric oriented. Model 3 of Tesla has an amazing run worldwide. Till now, Tesla has sold more than 5 lakhs units of Model 3 car.
The second major reason is the decline of Facebook share. In last week, social media giant share has lost around 1.5% value. A recent policy change by Apple has hurt the marketing segment of Facebook a lot. As per the new policy, there will be a decline in the marketing reach of Facebook.
Another major reason behind the success of Tesla is the success of Biden in the current election. Yes, Tesla will benefit a lot from Democrats’ success. The clean energy bill is one of the most advertised concepts in the current democratic campaign. Tesla is the leader in the Clean energy field. Once the bill is passed, Tesla’s value will increase further.
Current Capitol riots by the Trump supporters dented Facebook’s image further. Musk directly blamed Facebook for this unfortunate incident. Tesla’s India entry will also bring more good news for Musk.
Current Top 5 Position Holders among S&P 500
With the latest development, Tesla became the fifth largest company with a net worth of $767 billion. Facebook has a market cap of $765, as per a Bloomberg report. Alphabet, Amazon, Microsoft, and Apple are companies larger than Tesla.
Apple with a valuation of $2.2 Trillion is the largest among S&P. These all companies come under the category of S&P 500. S&P 500 is a stock market index. It calculates the stock performance of 500 large companies listed in the US.
Tesla shares are continuously increasing for the last 10 days in a row. With the current standing, Tesla has become the most valued auto company. The rise of Tesla is a big surprise for everyone including financial experts. Stock analysts also underestimated Tesla in the beginning.