Tech entrepreneur Elon Musk has topped Microsoft founder Bill Gates to become the world's second-richest man after a meteoric rise in his personal fortune. Mr. Musk's net worth jumped by $7.2bn (£5.4bn) to $128bn after shares in his car firm Tesla surged. Only Amazon founder Jeff Bezos is richer, according to the Bloomberg Billionaires Index. It comes after news Tesla shares will be added to the S&P 500, one of the main share indexes in the US. That triggered a fresh wave of buying of the electric carmaker's shares, sending the company's market value above $500bn and boosting the value of Mr. Musk's holding in the business.

Musk: Cheaper Tesla ready 'in about three years', Tesla shrugs off pandemic as sales hit a new record.
Tesla is already the most valuable car firm in the world, despite producing a fraction of the vehicles of rivals such as Toyota, VW, and General Motors.

On Tuesday, in a speech in Germany, Mr. Musk said it could "make sense" for Tesla to expand in Europe by entering the mass-market segment with a small car.

"In the US, the cars tend to be bigger for personal taste reasons," he said. "In Europe, (they) tend to be smaller."

And after years of losses, Tesla has seen five consecutive quarters of profit as sales of its cars perform well despite the pandemic.

The California-based firm will be the biggest new entrant on the S&P 500, with a market value of more than $500bn.

It means investment funds tracking the index will automatically hold its stock and benefit from gains in its share price - news that has excited investors.
 

Gates and Bezos

Bill Gates, who co-founded Microsoft, was the world's richest person for years before Mr. Bezos knocked him off the top spot in 2017. Mr. Gates's fortune is worth $127.7bn but would be higher had he not donated large sums to charity over the decades.

Jeff Bezos's net worth is estimated at £182bn by Bloomberg. He too has seen his personal fortune rise this year as demand for Amazon's services climbed in the pandemic.

Mr. Musk, who regularly courts controversy, has had an eventful past few weeks. Last weekend he tweeted that he "most likely" had a moderate case of Covid-19 and has had symptoms of "a minor cold." It came the day before four astronauts were launched to the International Space Station in a rocket built by Mr. Musk's SpaceX.

source: BBC

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Tesla’s losses were mounting last summer, massive debt payments were looming, and both Wall Street and federal regulators had run out of patience with the erratic behavior of CEO Elon Musk.

One year ago this week, shares plunged 14% after Tesla posted another quarterly loss, this one for $408 million, wiping out about $6 billion of the company’s worth.

Since then the stock has blasted off like a rocket at SpaceX, another Musk-led company. The electric car and solar panel maker has successfully opened a factory in China, introduced the Model Y electric SUV, made debt payments and posted profits for three straight quarters. Musk has also toned down his inflammatory posts on Twitter that had cost him and the company $40 million in penalties from U.S. securities regulators.

Today, Tesla’s market value is three times that of Ford, General Motors and Fiat Chrysler, combined. A single share of Tesla now goes for nearly $1,600 — a seven-fold increase from a year ago — making it one of the most expensive publicly traded shares in the world.

“Things just turned on a dime,” said Garrett Nelson, an analyst at CFRA who specializes in the automotive industry. “It’s just been one positive announcement after another.”

The dizzying performance on Tuesday qualified Musk for his second huge payday in less than three months, this one worth more than $2 billion. His net worth has soared to an estimated $72 billion, just behind Warren Buffett on the Forbes Billionaires list after passing the famed investor earlier this month. In total, Musk and other Tesla shareholders have made about $240 billion since March 18 when the stock stood at $361 — its low point for this year.

With second-quarter sales of Tesla vehicles outpacing the first despite a global pandemic, shares could jump again if Tesla surprises on Wednesday with a fourth consecutive profitable quarter. That could lead to Tesla’s admission into the club of corporate giants: the S&P 500 stock index.

But analysts have begun to question if the shares are running too hot. Analysts polled by FactSet expect a $228 million net loss from April through June. Only one analyst has a 12-month stock price target above the current value. A message was left Tuesday seeking comment from Tesla.

Nelson says shares have outpaced Tesla’s fundamental performance, and he’s telling clients to sell. He placed a price target at about two-thirds the current value of shares.

In an interview, Nelson said April-to-June registrations of Tesla vehicles fell by nearly half in California, the company’s biggest U.S. market. That’s an indication of waning demand for its vehicles, which start at $37,990 for a base Model 3 but the car can easily hit $60,000 with options.

Tesla also cut the price of its long-range Model Y by $3,000, which Nelson sees as a red flag. And the company is about to engage in a bout of heavy spending with new factories going up in Germany and the U.S.

There are also market factors that have flung share prices far higher, Nelson said.

Short sellers who perceived flaws at Tesla have since been buying shares to cover massive losses as the stock price leaped, Nelson said. Short-sellers now account for only 7.5% of Tesla’s outstanding stock, down from over 23% a year ago, he said.

Morgan Stanley analyst Adam Jonas has a $740 price target on Tesla, arguing that the market overestimates the company’s share of future electric vehicle and connected car revenue.

Investors are treating Tesla like tech stocks Apple and Amazon, which took off years ago after hitting $300 billion in market value, Jonas wrote in an investor note. Tesla hit that mark last week, but its revenue and pretax earnings are far smaller than either tech company when they reached the $300 billion valuation, he wrote.

Those who buy Tesla at around $1,500 per share have to believe that long-term U.S.-China trade relations will remain stable, older automakers will fail to make competitive electric vehicles, and big tech companies such as Google, Amazon and Apple won’t be successful in developing electric vehicle systems, he wrote.

Jonas, who is uneasy about deteriorating relations between the world’s two biggest economies, says traditional automakers are ready to spend over $400 billion on electric vehicles in the next five years, and he expects tech companies to enter the transportation business.

In the meantime, Musk is sitting pretty. The run-up in Tesla’s stock positioned him for a big payday after the Palo Alto, California, company awarded him a stock package worth more than $700 million in May.

That compensation is part of an incentive-laden deal that Tesla’s board worked out two years ago to inspire Musk to build a company that eventually generates $175 billion in revenue, and is valued at $650 billion.

Musk cleared another hurdle Tuesday when Tesla’s market value averaged $150 billion for a six-month stretch, according to data compiled by FactSet Research. Hitting that threshold means Musk is in line to receive 1.69 million stock options valued at $350.02, or nearly 80% below Tuesday’s closing price of $1,568.36.

The huge gap would make those stock options worth $2.06 billion on paper, although Musk can’t sell the shares for at least five years.

Billionaire Elon Musk's SpaceX has raised $1.9 billion in new funding, according to a regulatory filing on Tuesday.

This would be the largest single fundraising round to date by SpaceX, according to PitchBook data.

Bloomberg, which reported about the funding round last week, said the private rocket company will have an equity value of $46 billion after the transaction, citing people familiar with the matter.

The funding comes as SpaceX races to build out its Starlink satellite constellation to offer broadband internet commercially by the end of 2020. The company launched its eleventh batch of satellites on Tuesday and operates over 600 satellites in low-Earth orbit.

SpaceX’s Crew Dragon capsule completed its first two-month mission carrying astronauts for NASA in early August, with plans to start routine crewed missions to the International Space Station in late October.

Source: Reuters

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Results of public beta testing of SpaceX’s Starlink, which provides global internet coverage from space are out. Users who took the test have confirmed blazingly fast results. To take the beta test, users had to purchase the Starlink ground equipment for $499 and along with an additional monthly fee of $99 for services.

One of the users, who took the test, posted on Reddit that he got the streaming 1440p and 4K with zero buffering on YouTube. He wrote, “Latency averages about 34ms, I'm seeing some jitter increase when obstacles are in the path. It's on the roof with the ridgeline mount. I have a couple of trees in the way, but getting steady high speeds. Noticed a couple of interruptions, probably from satellite transitions, but almost 100% steady since initial setup.

I actually uploaded this post using Starlink.”

“As a few different people are looking for details on this, interruptions are about ten to fifteen seconds and seem to happen every few minutes. I haven't noticed enough repetition to determine, but I'm suspecting it may be when the satellite goes behind the few trees inside the obstruction area rather than satellite handoffs. The app claims Starlink has not been obstructed recently, though, so I'm uncertain,” it added.

Starlink had earlier sent invites to people who had signed for the beta program. A user on Reddit had shared the key points Starlink had mentioned about its Internet plan. As per the post on Reddit, the program called Better Than Nothing Beta offered estimated speeds between 50mbps to 150mbps, estimated latency of 20ms to 40ms. The phased array antenna and the router would cost a user $499 while the monthly subscription would cost around $99.

“With performance that far surpasses that of traditional satellite internet, and a global network unbounded by ground infrastructure limitations, Starlink will deliver high-speed broadband internet to locations where access has been unreliable, expensive, or completely unavailable. Starlink is targeting service in the Northern U.S. and Canada in 2020, rapidly expanding to near-global coverage of the populated world by 2021,” the Starlink website reads.

Elon Musk plans new laws for Mars

Musk had revealed his plans of creating self-sustaining cities on Mars. The reports state that future colonies created by SpaceX would use Starlink satellites to provide internet connections to people. Starlink services provided to Earth or Moon will be governed by the laws of the State of California. “For services provided on Mars, or in transit to Mars or other colonization spacecraft, the parties recognize Mars as a free planet and that no Earth-based government has authority or sovereignty over Martian activities,” the governing law states.

Source: indiatoday

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