Tesla stock price skyrocketed to over $1,000 per share on Monday, making CEO Elon Musk's net worth soar by $36.2 billion.
This comes following Hertz Global Holdings Inc.'s order for 100,000 Teslas.
Musk's net worth surge has been the highest one-day gain for billionaires as tracked by Bloomberg, surpassing Chinese mogul Zhong Shanshan's $32 billion rise in 2020 after his bottled water firm Nongfu Spring Co. went public. Interestingly, Musk's personal net worth of $288.6 billion has even eclipsed the market value of such companies as Nike and Exxon Mobil.
Tesla Shares Soars 13 Percent to Close $1,024.86
Tesla stock climbed 13 percent after the Hertz order was announced, and this brought the automaker's market value to go past $1 trillion. Around two-thirds of the South African billionaire's net worth is linked to share and options in the electric car manufacturer, per Bloomberg.
The company on Monday closed $1,024.86 on the Nasdaq Stock Exchange. With its historic climb, Tesla now entered that exclusive club among top U.S. corporations reaching trillion-dollar market capitalization--which also includes Amazon, Apple, Alphabet, Microsoft and Saudi Aramco.
Musk has since sped away from his other billionaire peers in terms of net worth. Bloomberg now ranks Musk ahead of Amazon founder and Blue Origin chief Jeff Bezos, who placed second in the its Billionaire Index with a fortune of $192.6 billion.
After the Hertz order was placed, Tesla announced it will provide the 100,000 electric vehicles into the Hertz fleet through 2022. Hertz renters will get access to the first Teslas on the company network by next month. As they use the Teslas, the renters can also utilize the automaker's Tesla Supercharger network.
The $4.2-billion Hertz deal is Tesla's largest as a bulk supplier. Road Show by Cnet estimated that the deal represented more than an entire month's worth of production, noting that Tesla had delivered 241,000 EVs in the third quarter of 2022.
Musk Expresses Surprise Over Tesla's Value Surge
Musk tweeted his surprise about Tesla's massive surge. In a reply to a tweet by investment fund Gerber Kawasaki co-founder Ross Gerber, he said that it was "strange" that the order "moved valuation" because Tesla is "very much a production ramp problem, not a demand problem."
Strange that moved valuation, as Tesla is very much a production ramp problem, not a demand problem— Elon Musk (@elonmusk) October 25, 2021
And, in a separate tweet, Musk wrote, "Wild $T1mes!"
Wild $T1mes!— Elon Musk (@elonmusk) October 25, 2021
While most automakers don't flaunt their deals with rental car companies, which are made at big discounts to dispose of weak selling units, Tesla's Hertz deal proved different. Apart from the size and magnitude of the deal, it proved attractive for investors since it showed Teslas were no longer niche products, but could dominate the mainstream auto market the soonest.
Hertz interim CEO Mark Fields told Reuters, "Electric vehicles are now mainstream," adding that "rising global demand and interest" is starting.
Musk had targeted yearly sales growth of 50 percent, reaching around 20 million vehicles annually. This figure translates to twice the sales volume of market leaders Toyota and Volkswagen.