Tesla: How a $4.2 billion deal yielded $119 billion

A “simple” order of $4.2 billion creates a “jump” worth $119 billion for the buyer and seller together, by about 28 times the size of the sale itself.

But that was the case on Monday, as Hertz Global Holdings’ order for 100,000 Tesla vehicles had a huge impact on the shares of the two companies.

In one of the largest electric vehicle purchases ever made, Hertz will spend $4.2 billion on the economy. dollars for cars, about $42,000 per car, according to Bloomberg. The announcement pushed Tesla’s stock to “jump” more than 12%, increasing the company’s market capitalization by $118 billion. Tesla is now the fifth most valuable listed company in the U.S.

Read more: Tesla Model 3: Best selling car in Europe in September

The fact that a deal with the recently bankrupt car rental company was what pushed Tesla’s market capitalization to over $1 trillion surprised even the company’s CEO, Elon Musk, who tweeted that the company is in high demand for vehicles.

Meanwhile, Hertz gained $1.17 billion in market capitalization after the deal was announced, in an unusual development for a company that spent most of the summer with a market capitalization of less than $8 billion.

The rise in Tesla’s stock solidified Musk’s position as the richest man in the world, boosting his net worth by $36.2 billion. dollars in one day. His property is now estimated at €288.6 billion. dollars, according to Bloomberg’s Billionaires Index.

While car rental companies usually require large discounts from automakers, the cost of ordering 100,000 vehicles suggests that Hertz pays close to normal prices.

According to Bloomberg, electric cars will be delivered within the next 14 months, and Tesla’s Model 3 will be available for rent at Hertz locations in the U.S. and in parts of Europe from early November. Customers will have access to Tesla’s network of fast charging stations, and Hertz is also building its own infrastructure for charging electric vehicles.

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