Tesla shares rose over 700 percent in the past year. Elon Musk is now the richest man in the world.
Elon Musk is currently the richest man in the world according to the Bloomberg Billionaires Index. He has overtaken the previous leader Jeff Bezos. The reason for this is a significant increase in Tesla shares.
Their value rose by more than 700 percent last year. In January 2020, the stock was still trading for $ 98 and now costs over $ 800. This has given company founder Musk a total of around 188 billion dollars.
The fact that Tesla shares are booming has to do with the image of the electric car manufacturer, says Andreas Herrmann, economics professor at the University of St. Gallen: “Tesla is the Robin Hood who changed the industry.” In addition, the story of Elon Musk fascinates people. “Everyone wants to be part of it.”
As a pure electric car manufacturer, Tesla is jumping on the topic of climate change. “Many investors like that – they want to invest in environmentally friendly companies”, says Matthias Geissbühler, Head of Investment at Raiffeisen Switzerland. The share therefore fits into every sustainable fund.
Tesla also experienced a boost when it was included in the American S&P 500 stock index. “New stocks must then be bought from existing index funds.” That led to strong demand for Tesla shares in December.
With research on self-driving cars and large projects such as the Tesla Gigafactory in Berlin, the company is also raising hope among investors: Tesla could still grow strongly and gain more market share. “The buyers are speculating on that,” explains Geissbühler.
This growth fantasy also attracts many private investors who want to make big money with Tesla shares. But according to Geissbühler, the share is now overvalued: a value of around 450 dollars per Tesla share is realistic. “A speculative bubble is increasingly forming.” Therefore, there is a risk that the share will lose value quickly and heavily at some point.
The fact that Tesla only relies on electric drives is currently still an advantage, but could be a risk in the future. “Other manufacturers are working on new technologies – if one of them prevails, Tesla will lose the electric car race,” says Geissbühler.
Although Tesla is currently way ahead of the field in terms of technology, other automakers still have a chance to catch up. “Companies like VW look back on a long tradition and have experienced engineers. They now have to make the change in the direction of e-cars.” So the competition for Tesla will continue to grow.
