Tesla’s market cap of $555 billion is now higher than that of Warren Buffett’s Berkshire Hathaway, which stands at $543 billion.
Tesla has had a knockout year, with its stock price increasing from $86 per share to $586 per share in eleven months.
This impressive share price growth has propelled Elon Musk, who has been Tesla CEO since 2008, to second place on the Bloomberg Billionaire’s Index.
According to Bloomberg, Musk is now worth $142 billion which places him behind the richest man in the world, Amazon founder Jeff Bezos (who is worth $187 billion).
Tesla staggering share price growth this year also means it is now the most valuable automaker in the world.
It officially overtook Toyota five months ago, and Tesla’s market cap is more than double that of its closest rival.
With a market cap of $555 billion, Tesla is also more valuable than many of the world’s top car manufacturers combined.
Tesla’s value is higher than the combined market cap of BMW, Mercedes Benz, Porsche, Ford, General Motors, Honda, and Hyundai.
Tesla versus Berkshire Hathaway
The S&P 500 Index Committee recently announced Tesla will join the S&P 500 on 21 December.
This gave the electric automaker a big boost among the investment community which saw its share price pop.
This means Tesla is now worth more than Berkshire Hathaway, the iconic American multinational holding company headquartered in Omaha, United States.
Berkshire Hathaway is run by its chairman and CEO Warren Buffett and his right-hand-man Charlie Munger, who serves as vice chairman.
The two companies are very different, which makes a like-for-like comparison challenging.
It is, however, worthwhile to compare their financial performance to put Tesla’s share price in perspective.
Charlie Bilello, founder and CEO of Compound Capital Advisors, summarised the finances of both companies, shown in the table below.
|Tesla versus Berkshire Hathaway|
|Sales||$28 billion||$279 billion|
|Net Income||$0.556 billion||$36 billion|
|Free Cash Flow||$1.8 billion||$27 billion|
|Market Cap||$555 billion||$543 billion|
|Price-to-earnings rato (P/E)||1,161||15|
Tesla versus Berkshire Hathaway market cap
Tesla’s market cap is now higher than Berkshire Hathaway.
Tesla: $28 billion
Berkshire: $279 billion
Net Income (TTM)…
Tesla: $556 million
Berkshire: $36 billion
— Charlie Bilello (@charliebilello) November 27, 2020