Tesla leaps 7% after 5-for-1 stock split makes shares more affordable
and promptly rallied as retail traders rushed to the stock. Tesla is following the iPhone maker's lead and should benefit from it, Wedbush analyst Dan Ives said in a Wednesday note.
"For Tesla given its strong retail base and growing appetite among investors around the story/overall [electric vehicle] demand, we believe this is a smart strategic move at the right time for the board to make," Ives said. The late-August split could serve as the latest booster for Tesla's already-lofty share price. The stock is up about 230% year-to-date, with investors' excitement growing around earnings beats, potential inclusion to the S&P 500, and strong vehicle deliveries amid the coronavirus pandemic. Tesla's current market cap establishes it as one of the world's most valuable automakers, despite its producing far fewer vehicles than legacy names such as VW or Toyota.
CEO Elon Musk hinted at the split on June 30, replying to a Twitter user that a stock split would be" " at the company's annual shareholders meeting. Tuesday's split announcement likely surprised some, as the meeting is scheduled for late September.Now read more markets coverage from Markets Insider and Business Insider:
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