Tesla Inc. is an American electric vehicle and clean energy company based in California. Over the years, they have grown their brand and have established themselves as one of the leading automobile manufacturing companies in the world. The recent push to switch to clean energy in an effort to clean up the environment has undoubtedly helped the company establish themselves in an otherwise mature industry. In 2020, Tesla Inc. has grown to become the most valuable company in the automobile industry despite having a production that is less than that of other companies such as Volkswagen, General Motors, and Toyota.
As the company’s value continues to increase, they have decided to launch their second billion-dollar share sale in the past 3 months. On Tuesday, December 8th, Tesla Inc stated that they were launching a $5 Billion share sale in order to raise more capital. This announcement comes as the company’s share price has been on a steady rise over the past year. The Monday before the announcement, Tesla’s share price reached a record high above $600 per share. This record raised the company’s market value to above $600 billion, further establishing themselves as the most valuable company in the automobile industry.
Goldman Sachs, Citigroup and Morgan Stanley, along with other major banks, will oversee the sale. The rise in the company’s share price has also been a result of their recent placement into the S&P 500 Index. They are one of the most valuable U.S. companies to ever join the benchmark.
Despite how promising Tesla currently looks to some investors, others believe that this is only a bubble and that adding the company to the index at this possibly inflated price is not the best idea. The average price target for analysts is around $400, a significant $240 dollars short of the current price. As of December 17th, the company’s share price is sitting at around $647.
Tesla shares are up an outstanding 670% on the year. This boost has pushed their Chief Executive Officer Elon Musk’s total net worth to $155 billion, up from $27 billion. According to Bloomberg Billionaires Index, this has made him the second richest person in the world.
The company said in September that their main reason for launching another share sale was to ease the future pressures on their debt. The company has plans to significantly expand production and build new factories in both Austin, Texas and in Berlin, Germany. The future of Tesla Inc. looks bright and it will be interesting to see what the future holds for the leading electric car manufacturer.