French luxury goods conglomerate, Moët Hennessy Louis Vuitton, commonly known as LVMH, has hit 400 billion euros (S$572.6 billion) in market capitalization, after its shares rose to a new record on Tuesday.
The multinational company has enjoyed significant growth from last year that saw its chairman and CEO Bernard Arnault overtake Tesla CEO Elon Musk in Bloomberg’s Billionaire Index, becoming the richest man in the world.
LVMH market value rose slightly above 400 billion euros after its shares jumped 0.4 percent, pushing it to an all-time-high of 795.7 euros, according to calculations made by Reuters based on Refintiv data.
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The record growth is attributed to the easing of covid restrictions in China, which has accelerated economic activities in the South Asian country. China, as the world’s second largest economy, is a choice destination for luxury companies and reopening its markets has seen LVMH sales boosted.
However, some analysts quoted by Reuters said further gains in the share price could become harder to achieve.
“Let’s say I’m waiting for 500 billion to mark it down as a milestone,” said Angelo Meda, head of equities and portfolio manager at Banor SIM in Milan.
“They are firing their last cartridge which is the Chinese reopening, going forward things will get tougher: tough comparisons, US dollar going down,” he added.
Both LVMH and Musk’s Tesla count on China to increase revenue growth. However, Tesla has seen its revenue dwindle in the past year, cutting its market cap slightly above $400 billion (406.85 billion as at Tuesday) from its peak of $1.2 trillion in January 2022.
The electric vehicle manufacturer has cut prices for some of its car models in the Asian markets, in a push to increase sales amid crashing revenue.
In a new move to increase sales, leading electric vehicle maker Tesla, has reduced the cost of some of its car models in Asia.
Reuters reports, citing a person with direct knowledge of the matter, that the decision cuts prices for Tesla Model Y and Model 3, and in addition to China, covers Japan, South Korea and Australia.
Arnault has also made changes at LVMH, with a reshuffle that saw his daughter Delphine appointed to lead Christian Dior, a subsidiary of the group. A new head was also named to oversee Louis Vuitton. But the reshuffle is not targeted at increasing sales.
However, Tesla remains the most valuable auto company and is expected to recover its lost market value soon following the adjustments the American company is making to boost sales. Musk, who has been largely blamed for Tesla’s ordeal, is also expected to bounce back soon, retaining his place in the Billionaire Index as the world’s richest man.
Tesla’s ordeal is attributed to the chief executive’s acquisition of Twitter late last year, which he’s been spending more time trying to reinvent. Musk lost $200 billion in 2022 as Tesla shares took a pounding, making him the highest loser of personal fortune in history.
Elon Musk’s net worth took a pounding in 2022, spiraling downward from its lofty $340 billion record in November 2021, to $137 billion, according to Bloomberg Billionaires Index, which makes him the first person in history to lose $200 billion.
The significant drop in Musk’s fortune was as a result of the plunge of Tesla’s stock, which has fallen 65% since last year. With his fortune largely tied to Tesla’s shares, Musk has got into the Guinness World Records as the biggest loser of personal fortune in history.
Japanese tech investor Masayoshi Son, previously held the record with a whopping $58.6 billion loss in 2000.