Tesla’s market value briefly topped US$100-billion for the first time, a threshold that will trigger a huge payout for Elon Musk if he can sustain the feat for months.
The electric car maker’s shares climbed as much as 1.4% in after-hours trading on Tuesday after closing the regular session up 7.2%. At the post-market high of $555.10, Tesla’s market capitalisation was roughly $100.1-billion, just short of Volkswagen’s $100.6-billion.
Musk, Tesla’s billionaire CEO, is eligible to receive the first tranche of an all-or-nothing pay award if the company’s market value stays above $100-billion for a sustained period. On paper, the first chunk of the award would net him about $346-million.
Tesla shares have more than doubled since the company reported a surprise third quarter profit and told investors it was ahead of schedule opening its factory in China and bringing out its next product, the Model Y crossover. Musk, 48, has built a commanding lead selling electric vehicles over established automakers.
Wall Street’s most bullish analyst on Tesla was behind Tuesday’s rally. New Street Research analyst Pierre Ferragu predicted the company will sell 2-3 million cars per year after 2025 at industry-leading margins. He raised his price target by $270 to $800, the highest among analysts surveyed by Bloomberg. — Reported by Craig Trudell, with assistance from Tom Randall, Dana Hull and Anders Melin, (c) 2020 Bloomberg LP