$100 billion capitalization for Tesla ahead of Volkswagen

  •   24/01/2020 - 10h22
  •   Adeline HARMANT

We just learned from an article in the Wall Street Journal that the Tesla Group has just passed the $100 billion mark in market capitalization, putting it ahead of the Volkswagen Group. Let's discover together the importance of this data for the stock market.

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$100 billion capitalization for Tesla ahead of Volkswagen
Image copyright: Automobile Italia - Flickr

Crossing a highly symbolic threshold:

The announcement of the group's market capitalization, which now exceeds $100 billion, is also the announcement of a symbolic threshold crossing for this company. Indeed, let us recall in this respect that when Bernard Arnault, current boss of the LVMH group, saw his fortune exceed this amount, he became the richest man in the world according to the ranking published in Forbes.

During Wednesday's session, Tesla, a company specialising in electric vehicles and headed by Elon Musk, crossed this threshold and thus overtook the German manufacturer Volkswagen in the same sector. In terms of valuation, Tesla thus becomes number two in the ranking, just after the Japanese manufacturer Toyota.

Moreover, this milestone has also provoked a reaction from the market regarding the positive impact it will have on the group's boss, who is a 20% shareholder in the company and whose personal assets amount to 32 billion dollars. If Tesla shares remain at their current level for the next 6 months, Elon Musk's compensation will therefore be 1% of this $100 billion, which would provide him with a capital gain of around $350 million.

 

Tesla boosted by a huge success on the stock market:

In addition to this very interesting news for investors, it should be noted that the Tesla share has been particularly successful in recent years and that its price has tripled since June 2019. It should also be noted that the lowest level of this stock had been hit following a negative sequence that began in 2018 when the group was unable to increase its sales sufficiently, as well as its profits. At that time, Elon Musk was also in dispute with the SEC of the American Stock Exchange following comments he had made on the social network Twitter at the time of the diversification of the company's activities with Space X in particular and while he was using marijuana during a radio interview.

 

A success hailed by the U.S. government:

Of course, this news provoked an immediate reaction from the American government, since President Donald Trump announced this morning that he was delighted with the success of this undertaking.

The Tesla share is therefore one of the titles to be followed in the coming sessions.