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Tesla topples Facebook: Share prices jump 8% after Musk declared as richest man (AFP)
Tesla topples Facebook: Share prices jump 8% after Musk declared as richest man (AFP)

Tesla surpasses Facebook in market value as Elon Musk becomes world's richest

After Tesla CEO Elon Musk surpassed Amazon's Jeff Bezos to become the world's richest person, the company's shares surged to exceed Facebook's stock market value for the first time. Tesla shares on Thursday jumped nearly 8% to a record high in heavy trading to end the session at $816.

After Tesla CEO Elon Musk surpassed Amazon's Jeff Bezos to become the world's richest person, today the company's shares surged to exceed Facebook's stock market value for the first time.

Tesla shares on Thursday jumped nearly 8% to a record high in heavy trading to end the session at $816. Currently, the market capitalisation of electric car maker stands at $774 billion, making it Wall Street's fifth-most-valuable company, just behind Google-parent Alphabet and ahead of Facebook. Meanwhile, market capitalisation of Facebook stands at $765 billion after its shares rose about 2%.

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On Thursday, over $39 billion worth of Tesla's shares were bought and sold during the session, a record for Tesla and more than the next three most traded companies combined, which were Apple, Alibaba Group Holding and Amazon.com.

The jump in Tesla’s stock price further inflates a valuation light-years apart from other automakers on numerous metrics. Tesla produced just over half-a-million cars last year, a fraction of the output of Ford Motor Co. and General Motors Co.

The rise of Elon Musk

Tesla’s share price, which surged 743% last year on the back of consistent profits, inclusion in the S&P 500 Index and enthusiasm from Wall Street and retail investors alike. The shares have gained more than 23,900% since its 2010 initial public offering, including a 5-for-1 stock split last year.

Currently, Tesla shares are on a 10-day winning streak, the longest since April and only the second time since its 2010 initial public offering it’s gained so many days in a row.

The relentless surge has forced Wall Street into a perpetual game of catch-up, with analysts’ average price target still far below the current stock price. On Thursday, RBC Capital Markets analyst Joseph Spak upgraded Tesla to the equivalent of a hold rating from a previous sell recommendation, saying he got the stock “completely wrong."

Spak raised his 2025 delivery estimate for Tesla to 1.7 million cars from 1.3 million, and said his biggest mistake was underestimating the company’s ability to take advantage of its stock price to raise capital and fund growth or acquisitions. The analyst more than doubled his price target to $700 from $339.

Including Thursday's gains in Tesla shares, Musk had a net worth of more than $188.5 billion, $1.5 billion more than Bezos, according to Bloomberg’s Billionaires Index, a Bloomberg report suggests.

Musk’s rise is even more astonishing given his dust-ups and gaffes in recent years, typically exacerbated by his spontaneous tweets. In 2018 he agreed to pay a $20 million fine to the Securities and Exchange Commission and step down as chairman of Tesla after tweeting a notion to take the company private at $420 a share, with “funding secured" -- something he never did.

On several occasions Musk has bemoaned being “cash poor." The vast majority of his net worth is tied up in equity of his companies, including Tesla -- which pays no dividends -- and closely held SpaceX and the Boring Company, a tunneling venture. Yet he’s professed to have little interest in the material trappings of wealth.

After reports of his new status were published Thursday, Musk tweeted “How strange," then added “Well, back to work."

He tweeted last year he intended to sell “almost all" his physical possessions and he told German publisher Axel Springer in a December interview that the main purpose of his wealth is to accelerate humanity’s evolution into a spacefaring civilization.

Stocks smash records as investors shrug off US violence

Stock markets surged higher on Thursday, with the three major US indexes pushing into record territory, as traders brushed off the storming of the Capitol building in Washington.

On Wall Street, the Dow Jones Industrial Average ended above 31,000 for the first time, while Frankfurt broke 14,000 points for the first time, before falling back but still set a new closing level record.

The dollar rose across the board, while bitcoin continued its record run and was flirting with $40,000, having passed $30,000 only on Saturday.

Oil prices pushed higher, building on recent strong gains.

"Traders are unfazed by the chaos that we experienced on Capitol Hill yesterday," noted Naeem Aslam, chief market analyst at AvaTrade.

US lawmakers in the early hours of Thursday morning finally managed to formally certify Joe Biden as the next US president, dealing a hammer blow to Donald Trump whose supporters stormed the Capitol hours earlier, triggering unprecedented scenes of mayhem in the seat of US democracy.

Trump, who spoke to a rally early in the day and urged them to march on the Capitol, in the wake of the mayhem promised an "orderly transition."

But investors focused on the increased chances of another huge stimulus package under a Biden administration especially after Democrats won the two Senate seat runoffs in Georgia giving the party control of the chambers.

Biden also has pledged to accelerate the vaccine rollout, which raises hopes the Covid-19 pandemic can be reined in.

(With inputs from agencies)

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