Tesla shares continue to soar in value hitting a record $492.14 per share by the close of trading on Wednesday, boosting the electric automaker’s market capitalization to almost $89 billion, which is more than General Motors and Ford combined.
The company’s current share price is remarkable when you consider that, in June 2019, shares had halved in value in just six months. Fast forward seven months and they have climbed 160 per cent, hitting a new high and making Tesla the highest-valued automaker in U.S. history.
There are a number of reasons to explain the sudden surge in Tesla’s share price. For starters, Elon Musk’s company published delivery figures for the final quarter of the year, squeezing past the low end of its goal of delivering between 360,000 and 400,000 vehicles in 2019, shipping a total of 367,500 vehicles.
Musk Will Be Happy: Tesla Meets Delivery Target For 2019, Sends Share Prices To New Record Highs
In addition, Tesla’s Gigafactory in Shanghai is up and running less than one year after ground was broken at the huge site that has the capacity to build up to 500,000 vehicles annually.
Chief investment strategist at MainStay Capital Management, David Kudla, however, told Reuters that investors should consider a variety of factors if they are to consider buying Tesla shares.
“It’s clear that Tesla is back to being a story stock and there’s a lot of good news out there,” he said. “But, there are still some problematic issues out there, chief among them is what will its sustained profitability look like, and when will it start to be valued like a car company and not a tech company.”
