The stock market continued its inexorable march higher on Thursday, as even violent uprisings at the U.S. Capitol weren't enough to stop the upward momentum on Wall Street. Most major market benchmarks traded at new all-time records by Thursday afternoon. As of 2 p.m. EST, the Dow Jones Industrial Average (^DJI 2.12%) had climbed 193 points to 31,022. The S&P 500 (^GSPC 1.45%) gained 52 points to 3,801, and the Nasdaq Composite (^IXIC 1.07%) soared 297 points to 13,038.
One of the hottest areas of the market lately has been in companies coming public, and special-purpose acquisition companies have been an alternative to traditional IPOs that many privately owned businesses have chosen. Today, Social Capital Hedosophia Holdings V (IPOE) snagged a much-followed company on the border between tech and finance. Meanwhile, Tesla (TSLA 3.11%) CEO Elon Musk became the world's richest person as the company's stock climbed above the $800 per share mark.
SoFi to come public via Social Capital
Shares of Social Capital Hedosophia Holdings V soared 44% Thursday afternoon. The stock had been up as much as 78% earlier in the day, with investors excited about the SPAC's announcement that it had found an acquisition candidate.
Social Finance, better known as SoFi, agreed to a merger that will value the company at $8.65 billion. The next-generation financial services platform looks to help people reach financial independence, offering a single app that lets users save, borrow, spend, protect, and invest money. Members are able to get mortgages, refinance loans, obtain credit cards, buy insurance, and handle bank and brokerage accounts from one platform.
SoFi also owns financial services technology infrastructure specialist Galileo. With 50 million accounts on its platform, Galileo brings diversification to SoFi's business.
Social Capital CEO Chamath Palihapitiya had great things to say about the deal with the fintech company. "SoFi's innovative, member-first platform has demystified financial services for millions of Americans," Palihapitiya said, and adding new services has resulted in significant cross-selling.
SPACs have become all the rage, and Palihapitiya has become the king of SPACs. Deals like this are sure to perpetuate the Chamath mystique well into 2021 and beyond.
The richest person in the world
Elsewhere, shares of Tesla climbed almost 7%. That sent the stock well above the $800-per-share mark, giving the electric-vehicle maker a market capitalization of more than $750 billion and making CEO Elon Musk richer than anyone else.
The latest catalyst for the stock's big upward move came from a longtime critic of Tesla. Analysts at RBC Capital had had an underperform rating on the stock, with a price target of just $339 per share. However, those analysts finally gave up on their bear case, upgrading Tesla to sector perform and more than doubling their price target to $700 per share.
RBC was direct in its self-assessment on its position, admitting that it had gotten its previous call on Tesla "completely wrong." Strong delivery numbers in 2020 led the analysts to upgrade their views on future vehicle volume. With that comment, RBC joins a number of other stock pickers who've underestimated Tesla's upward momentum.
Electric vehicles remain a competitive space, but Tesla has a huge first-mover advantage. As long as that persists, bullish investors will have an argument for why the stock should keep climbing.