Tesla’s valuation tops $100-billion as stock rally continues

Andrew Cummings
January 23, 2020

Tesla's stock traded around $585 per share at time of publication with a market cap around $106 billion.

The milestone comes less than a month after Tesla's stock crossed $420, the infamous price at which Chief Executive Officer Elon Musk had tweeted he would take the electric auto maker private.

Tesla Inc became the first Sh10 trillion ($100 billion) publicly listed US carmaker in extended trading on Tuesday, in a sign of Wall Street's confidence in an all-electric future.

Shares of the electric carmaker were up 8.1% at $591.78 in late morning trading, continuing their furious rally that has more than doubled the share price in the last three months.

Under a compensation plan approved by Telsa's board in 2018, Musk is to be paid in stock awards based on the performance of the company - a payout that could be worth as much as $50 billion if Tesla's value reaches $650 billion.

With Tesla surpassing the $100 billion market cap, Musk is in line for a possible bonus payment if the company can maintain it. Musk, who owns about 20% of Tesla, now takes no salary as CEO.

The package, using shares which "vest" based on certain criteria, gives Musk stock worth around 1% of the company for each of 12 milestones over a 10-year period.

Tesla's market value also puts Musk a step closer to earning the first $346m tranche of options in a record-breaking pay package.

Shares have tripled in value since May, meaning Tesla's market capitalisation now exceeds the value of Ford and General Motors, combined.

After saying three months ago that Tesla was no niche manufacturer anymore, he told top Volkswagen executives at an internal meeting in Germany last week that connected vehicles will nearly double the time consumers spend online, and that cars will "become the most important mobile device".

It "speaks to the inflection in electric vehicle demand globally", Wedbush Securities analyst Daniel Ives wrote in an email.

At the time the deal was agreed in March 2018, Tesla was valued by the stock market at $54.6bn. "I said I've never seen that before", Trump added.

Trump called Musk "one of our great geniuses", during an appearance on CNBC from the World Economic Forum in Davos, Switzerland. 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.

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