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Tesla's market cap unsustainable, not linked to entrepreneurial capabilities of Elon Musk: Rakesh Jhunjhunwala

According to Rakesh Jhunjhunwala, the market-capitalisation of Tesla is not going to last and is not linked to the entrepreneurial capabilities of Elon Musk

twitter-logoBusinessToday.In | March 1, 2021 | Updated 16:35 IST
Tesla's market cap unsustainable, not linked to entrepreneurial capabilities of Elon Musk: Rakesh Jhunjhunwala
Elon Musk has not given the market-cap of Tesla, says Rakesh Jhunjhunwala

Ace investor Rakesh Jhunjhunwala believes that Tesla CEO Elon Musk is a "true pioneer and entrepreneur", however, he wasn't sure about his electric vehicle company's valuation. According to the billionaire stock market investor, the market-capitalisation (m-cap) of Tesla is not going to last and is not linked to the entrepreneurial capabilities of Musk.

"Elon Musk has not given the market-cap of Tesla. It is the public who has created it. This market-cap is not going to last. But that does not take away some of the entrepreneurial capabilities or performance of Mr. Musk. The valuation of Tesla is not linked to the entrepreneurial capabilities of Musk," Jhunjhunwala told ET Now.

Also read: Bitcoin at new high of $53,263 after Elon Musk defends Tesla's investment

The m-cap of Tesla breached $800 billion in January 2021 for the first time, making Musk the world's richest person briefly. The current market cap of the American electric vehicle company stood at $648 billion as on February 26. The stock zoomed 743 per cent in 2020 on the back of strong revenue growth, inclusion in the S&P 500 Index and higher enthusiasm on Wall Street. However, it has fallen 3 per cent in 2021 so far.

Also read: Jeff Bezos back as richest man in the world as Elon Musk's net worth falls by $15 billion

Musk, who begun 2020 with worth around $27 billion, saw his wealth surge to $180 billion. This is reportedly the fastest bout of wealth creation in history, driven by strong rally in Tesla shares. The South Africa-born engineer owns 20 per cent stake in the automaker. Besides, he also sits on around $42 billion of unrealised paper gains on vested stock options, which he received in 2012 and 2018. Adding to this, Musk reportedly holds a majority stake in Space-X, which accounts for about $15 billion.

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