Tesla Inc.’s market value briefly crept above $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 Tuesday after closing the regular session up 7.2%. At the post-market high of $555.10, Tesla’s market capitalization was roughly $100.1 billion, just short of Volkswagen AG’s $100.6 billion.
Musk, Tesla’s billionaire chief executive officer, 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 million to 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.