Welcome to another Tesla Tuesday! At the bottom of my incredibly long post about why we ordered a Model Y, I included the disclaimer that I own Tesla stock. One share to be specific. Buying individual stocks is a no-no for me. It’s a losing game. (If it was possible to be good at it, the game wouldn’t work.) But it felt like if we were going to own one of their cars, it would be fun to own a share of their stock. It’s a lot less dorky than buying a hat.
But as it turns out, through a lot of luck, I purchased the stock right before it went on the biggest run in the history of the stock market. (The green dot below is where I purchased.) Fortune.com did an article about how in 12 trading days, Tesla added more market cap than any other company in the history of capital markets. I bought the stock on October 15 and in the next 12 days, Tesla’s stock went up over 45%. The first jump came after they announced their Q3 earnings. Then a few days later Hertz announced that they were purchasing 100,000 Teslas for its rental fleet. That will mean Teslas make up 20% of their entire fleet. And all of those Teslas will be purchased at full price just like the rest of us. Yesterday it went back down because Elon announced that he’s selling a chunk of his stock either as some combination of freeing up capital to pay some of his taxes or to appease people who think rich people don’t pay enough.
The percentage increase isn’t a record, but Tesla was already so highly valued that this represented almost a $400 BILLION increase in the market value of their company. Tesla is now worth more than a trillion dollars making it one of 7 companies in the trillion dollar club.
For comparison, let’s look at the market value of some other car companies you might have heard of:
- Ford: $77 billion
- General Motors: $85 billion
- Daimler: $93 billion
- Fiat Chrysler: $64 billion
- Toyota: $292 billion
- Volkswagen: $87 billion
Tesla is at $1.15 TRILLION. That’s almost twice as much as all those other car companies combined.
Is it justified? Who knows. They keep raising prices and the order list keeps getting longer. They’re building out new factories, securing lithium deals in huge quantities to make batteries, and opening up their charging network to the world. Yes, their valuation seems very high right now, and I expect that at least some of the other car companies will eventually catch up, but they’ve got a long way to go to catch Tesla and it’s not like Tesla is resting on their laurels.
This feels like the time I walked into a casino, put $20 on red, won, and then walked out with my winnings… except I haven’t walked out yet.