Electric carmaker Tesla’s stock market value has surpassed the combined value of General Motors and Ford Motor for the first time.
It came as Tesla’s shares jumped 4.9 percent on the Nasdaq market on Wednesday, closing at a record US$492.14 per share and taking the firm’s market capitalization to US$88.7 billion.
The figure is US$2.4 billion larger than the combined market value of GM and Ford, given the automakers’ current respective market capitalizations of US$49.5 billion and US$36.8 billion.
Fueled by a surprise third-quarter profit, progress at a new factory in China and better-than-expected car deliveries in the fourth quarter, Tesla’s stock has more than doubled in the past three months, Reuters noted.
“It’s clear that Tesla is back to being a story stock and there’s a lot of good news out there,” the news agency quoted David Kudla, chief investment strategist at MainStay Capital Management, as saying.
“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.”
The progress made by Tesla CEO Elon Musk has defied short-sellers and other traders expecting the automaker to be overtaken by long-established car companies, including GM and Ford.
While Tesla’s recent progress has cheered supporters, many analysts and investors however remain pessimistic about the firm’s ability to consistently deliver profit and cash flow.
Tesla has repeatedly missed targets in recent years and Musk’s mercurial behavior has come under close scrutiny from financial regulators and shareholders of Tesla, Reuters noted.
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