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'Greater fool' theory powers Tesla shares' ascent

Investors expect passive funds to buy stock at any price after addition to S&P 500

Tesla's valuation is nearing the rarefied territory of the tech giants.   © Reuters

TOKYO -- Few names in global markets are as hot as Tesla right now.

The electric-car company raced past Toyota Motor on July 1 to become the world's most valuable automaker. Its market capitalization hit $332.9 billion on Monday -- as large as Japan's seven biggest auto manufacturers combined.

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