- Elon Musk’s Tesla market value is now below Warren Buffett’s Berkshire Hathaway.
- Tesla stock was affected by the wider tech sell-off as well as concerns about Musk’s Twitter acquisition.
- Berkshire has profited from the rush for haven assets and higher interest rates.
Elon Musk’s TeslaWarren Buffett’s abysmal record of success has fallen below his. Berkshire HathawayIn market value, investors continue to swap riskier stocks for more secure options and worry Musk’s Twitter acquisition could be costly distraction.
Tesla’s market cap fell to just above $600 billion at Tuesday’s closing, far less than Berkshire’s $645 billion. Buffett’s company has officially reclaimed its spot as the fifth-largest company in the S&P 500 index.
This is a remarkable reversal considering Musk’s electric vehicle maker shares soared from $30 split-adjusted at the beginning of 2020 to north at $400 last November. It lifted the company’s market capital from less than $100 billion to more than $1.2 trillion at its peak.
The latest data shows that Tesla stock plunged by 52% in the past year, wiping out approximately $600 billion of its market cap. Berkshire shares are down 3% while the market cap of the conglomerate has remained virtually unchanged. Their fortunes reflect how investors view the risk associated with each stock.
Musk’s company has been hit hard by an exodus of technology stocks due to stubborn inflation, rising interest rate and a coming recession.
Businesses that are growing quickly promise the largest portion of their profits in future. However, these dollars are less attractive as prices rise. Savings accounts and bonds offer greater, more predictable returns.
Tech companies are also more susceptible to economic downturns because of their high valuations, insufficient cash flows and speculative investments.
Musk also closed the $44 billion purchase of Twitter and is currently reorganizing the social-media platform. He has laid off approximately half of its workforce and is trying to stop it losing cash. He Just soldAbout $4 billion worth of Tesla stock. This will likely be used to service the loans that he took out in order to finance his takeover.
Tesla’s close friends fear Musk is losing focus on the automaker. Might sell more sharesThis could limit the company’s prospects as well as lower its stock prices.
Berkshire stock has performed better in the past year because investors consider it a safe investment. Buffett’s company You actually gained from itHigher interest rates and a stronger Dollar last quarter, reflecting its huge cash and bond holdings, and its largely domestic focus.
Buffett is well-known for his tendency to buy stocks and businesses with strong brands. These brands include Kraft Heinz, Coca-Cola and Kraft Heinz. This allows them to increase prices to offset inflation. Berkshire’s wealth is vastly diversified, so it is unlikely that a crash in the housing market or a drop in retail sales will cause Berkshire to lose its earnings.
Berkshire is notable for its exemplary record of excellence. poured upwardsChevron, Occidental Petroleum and Chevron were injected with $25 billion this year. It now includes the two oil-and–gas companies among its top holdings in its stock portfolio.
These bets have increased in value significantly this year as Russia’s war in Ukraine continues to roil the energy markets and drive up costs. This has helped offset any weakness in other areas within Berkshire.
Tesla could make another gear and surpass Berkshire in market valuation, but Buffett still has the advantage over Musk for the moment.
Here is a chart that compares Berkshire and Tesla’s market caps over the past few years:
Markets Insider
