- Hertz Global Holdings (OTCPK: HTZZ) stock jumped after it announced plans to order 100,000 Tesla electric vehicles to expand its rental car fleet.
- According to Dow Jones Market Data, it took less than two years for Tesla to grow from US$100 billion to US$1 trillion. By contrast, Amazon took more than eight years.
Electric vehicle maker Tesla Inc (NYSE: TSLA) on Monday surpassed the US$1-trillion mark in market capitalization for the first time, joining the ranks of a select group of companies with similar valuations after receiving orders for 100,000 vehicles from rental car firm Hertz Global.
The Florida-based Hertz Global Holdings (OTCPK: HTZZ) plans to expand its rental car fleet as it sees increased demand in recent times. It also offers light trucks and crossovers for rent. Hertz’s also rents industrial, construction, and material-handling equipment to clients.
Tesla is expected to deliver the vehicles by the end of 2022. The company will also build the charging infrastructure across global locations where Hertz operates.
Alphabet Inc., Apple Inc, Microsoft Corporation, and Amazon.com Inc. are the only American companies currently worth more than US$1 trillion.
Last week, Tesla had reported record quarterly earnings. Its third-quarter revenue rose to US$13.76 billion from US$8.77 billion a year ago, beating Wall Street estimates.
Reacting to Tesla’s latest valuation, CEO Elon Musk tweeted: “Strange that moved valuation, as Tesla is very much a production ramp problem, not a demand problem.”
The TSLA stock closed at US$1024.86, up over 12% on Monday, raising Tesla’s worth to US$1.03 trillion. According to Dow Jones Market Data, it took less than two years for Tesla to grow from US$100 billion to US$1 trillion. In contrast, Amazon took more than eight years.
Musk holds the largest shareholder in Tesla and the world’s wealthiest person. Musk’s holdings in Tesla were worth around US$297 billion as of Monday, according to data firm Equilar Inc. It is more than the world’s second-largest automaker Toyota Motor Corp’s market capitalization.
Source – pixabay
Image Description: Trending stocks Hertz Global Holdings (OTCPK: HTZZ) and Tesla (NYSE: TSLA).
Hertz Global’s business expansion
Besides Tesla, Hertz has teamed up with Tom Brady, a seven-time Super Bowl champion and entrepreneur, to expand its fast-mobility and travel business.
Hertz customers will be able to rent Model 3 Tesla cars at airports and other major landmarks in the US and some European cities. Hertz, in partnership with Tesla, will install thousands of chargers along major routes operated by the rental company.
In all, it will set up 3,000 supercharging stations in the US and Europe.
Hertz plans to offer differentiated and premium rates for Tesla EV services. It will also provide a fast EV rental booking service through the Hertz mobile app.
More than 20% of Hertz’s rental fleet will be EVs after the Tesla cars are introduced.
Hertz first introduced EVs to its rental fleet in 2011.
Hertz earned revenue of US$1.87 billion for the three months ended June 30, 2021, compared to US$0.832 billion in the June quarter of 2020. The net loss attributable to the company was US$4.0 million compared to US$952 million in the comparable period of the previous year.
Its adjusted corporate EBITDA was US$639 million against an adjusted negative EBITDA of US$587 million in the June quarter of 2020.
Hertz is one of the world’s largest vehicle rental companies. Its top brands include Hertz, Thrifty, and Dollar rentals. Its market capitalization is US$12.8 billion.
The Hertz stock jumped around 10% after the news of its Tesla vehicle orders. The stock gained 27% in one month.
Early this month, Hertz had applied for public offering, or Form S-1 registration statement, with the Security and Exchange Commission (SEC). The offering may come by the end of this year, subject to regulatory approval.
According to industry experts, electric vehicle sales jumped around 200% last year YoY and are expected to keep up that momentum with a renewed government push for clean energy vehicles. However, investors must exercise due diligence before investing in the stock market.