Tesla Inc TSLA on Monday joined the club of a select few companies that have traded with a market capitalization of $1 trillion but CEO Elon Musk finds it "strange."
What Happened: Tesla shares jumped on Monday after the news that the maker of Model 3 and Model S electric vehicles has landed its biggest ever order from rental car company Hertz Global Holdings HTZZ.
The 100,000 electric car order from Hertz drew praise from investor Ross Gerber on Twitter, who dubbed the move “huge” and “super smart.” Gerber said the huge rental demand, and the need to switch to green, implies the entire rental fleets will need to be replenished.
Musk found it peculiar that the news of the order moved the valuation up The Tesla CEO said the company does not have a demand problem but it faces “very much production ramp problem.”
Why It Matters: Tesla delivered impressive third-quarter earnings as it navigated through the chip crisis but warned “parts shortages” have factories running below capacity. Just last week, Tesla Chief Financial Officer Zach Kirkhorn told investors in a post-earnings call that there’s "an awakening" for electric vehicles and “it's caught us a little bit off guard.”
Tesla took just over 11 years since its public listing to cross that landmark. The stock joins the rank of rival tech companies including Apple Inc. AAPL, Alphabet Inc GOOG GOOGL, Microsoft Corp MSFT, Amazon.com Inc AMZN and Facebook Inc FB that trade, or have traded, with a market capitalization of over $1 trillion.
Price Action: Tesla shares jumped to close 12.66% higher at $1,024.86 a share on Monday.
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