Tesla’s market value rises by $70 billion in five days, equal to the sum of the Detroit giants.

7 (Xinhua) — Tesla’s shares closed above $1,300 on Monday, rising for five straight sessions. Over the past five trading days, the company has added $70bn to its market capitalisation, equivalent to the combined value of Detroit’s big three, GM, Ford and Fiat Chrysler. Tesla’s share price has been strong this year, recovering quickly from a massive pandemic-related sell-off.

Tesla's market value rises by $70 billion in five days, equal to the sum of the Detroit giants.

The gains in recent days have been helped by second-quarter deliveries that far exceeded market expectations. Over the past week, the company’s average daily market value has risen by the equivalent of a Fiat Chrysler.

While sceptics say the stock’s current rate of growth may be out of touch with reality and driven by “narrative power,” Tesla’s followers don’t think so.

Daniel Ives, analyst at Wedbush Securities, said: “There is definitely an important retail factor driving up share prices. He was referring to retail investors trading on platforms such as Robinhood.

Still, he says, many big institutional investors now want a slice of Tesla’s and electric vehicle markets. “In the new Crown virus pandemic and gloomy macro environment, the company has just released a delivery figure of 90,000 vehicles, especially when other automakers face serious challenges.”

Tesla reported on July 2 that it delivered 90,650 electric vehicles in the second quarter, well above market expectations.

Craig Irwin, an analyst at Roth Capital Partners, also points out that large sums of money are eager to get into Tesla. He said the company’s valuation was driven by fund managers who classifyed Tesla as a big growth stock with companies such as Naypyidaw, Amazon and Facebook.

The latest rally has pushed Tesla’s market capitalisation to $170 billion so far this year, more than all but the 30 largest companies in the S.P. 500.

Ivan Feinseth, an analyst at Tigres Financial Partners, said: “Tesla’s valuation doesn’t make sense by any traditional measure,” but “it’s not a traditional company, how can you measure it by traditional standards?” “