Tesla has been at the forefront of a strong bounce-back for US tech stocks as shares in Elon Musk’s company surged by as much as 20%, partly due to the release of figures showing higher sales in Asia.
The electric car company was also boosted by an upgrade in personnel, as well as a general wider upturn in investor sentiment which meant the tech-dominated Nasdaq index climbed by almost 4%.
Investors in Tesla shares have faced a turbulent few months so far this year, with Musk becoming the world’s richest person for a short time after a stock surge before the 49-year-old lost his crown as shares in his firm fell again.
Tesla was the stand-out performer in a week on the stock markets that saw tech stocks generally surge as they stage a recovery following sharp losses over recent weeks. Apple, Amazon and Microsoft all made sizable gains.
These are among the so-called ‘stay at home’ stocks that have continued to net backers profit throughout the pandemic but more recently have come off those highs.
Tesla in particular continues to be at the heart of market volatility as it has over the past year or so. In 2020, it became the world’s most valuable car maker despite manufacturing a fraction of the volume of vehicles produced by more conventional rivals.
The firm only recently reported its first ever annual profit, due mainly to its decision to sell carbon credits to less environmentally friendly companies.
The value of Tesla has also been heavily linked to the fluctuating fortunes of Bitcoin, after it was revealed that the company had made a $1.5 billion investment in the cryptocurrency.
Mr. Musk wrote on social media that the company’s decision to invest in cryptocurrency was not taken by him personally.
He said: “Tesla’s action is not directly reflective of my opinion.
“Having some Bitcoin, which is simply a less dumb form of liquidity than cash, is adventurous enough for an S&P 500 company.”
Tesla was also boosted by one analyst raising his rating of the stock to “buy” from “neutral”.
The shares are still more than 20% lower than their January record high but are up by 70% over the past six months.
In other business news, Singapore-based firm Grab is reportedly in talks about a stock market listing that could potentially value the company at $40 billion. The company started as a ride-hailing app and has now developed into one of South East Asia’s best known tech companies.
The Wall Street Journal is reporting that Grab is discussing a deal with a special-purpose acquisition company (Spac). Spacs are set up to buy a private firm to merge with and then take public on the stock market.
Japanese conglomerates Softbank and Toyota are among Grab’s high-profile backers, with the relatively young company’s most recent valuation reaching the heights of around $15 billion.
Since it was established in 2012, the company has emerged throughout South East Asia as the dominant ride-hailing app.
Grab bought out Uber’s South East Asian operations in 2018 in a deal that left the US ride-hailing giant with a stake in the Asian firm.
Regulators, concerned about a monopoly, fined the two companies more than $4.8 million each, but Grab still managed to go on to further expand its services, soon becoming one of South East Asia’s super-apps, providing users with restaurant and grocery delivery capabilities, as well as financial services for merchants.
Until recently Grab and its Indonesian rival Gojek were considering a merger but talks have stalled as it now appears Gojek is seeking a deal with Indonesian e-commerce leader Tokopedia ahead of its own listing in Jakarta and the US.
“Grab’s founder Anthony Tan has always had big ambitions for the super-app.
When I interviewed him in 2018, he was trying to carve out a name for the company, taking an Asian company global,” Asia business expert Karishma Vaswani said.
“In the last three years, he and his team have achieved much of that – expanding across Indonesia, Vietnam and the Philippines, turning into a financial app from a transport firm.
“But running a business like this takes money, and by some estimates, Grab won’t break even until 2023.
“The company maintains it is profitable in some divisions, but Mr Tan also needs access to funds to continue his expansion plans. So far he’s relied on the largesse of investors with big pockets.
“Grab may be betting that the timing for an IPO is right – several Asian tech companies that aren’t making much in the way of profits have listed successfully recently, partly because there’s a lot of liquidity in stock markets.
“But a listing would also give investors an insight into how much profit Grab is actually making – which could prove to be far less advantageous for the firm.”