Elon Musk’s Tesla, one of the leading automobile companies globally, recently roamed in the news after the stock split announcement spurred further stock rally. Tesla Inc. added about $84 billion to its market value, more than the whole market capitalization of Ford Motor Company. Tesla added the same after the electric-vehicle maker said it planned a second stock split in about two years.
‘Stock splits’ for big companies have come back in the spotlight in recent times, with Amazon.com Inc. saying earlier in that month that it would conduct a ’20-for-1′ stock split. Own announced plan of Alphabet Inc. in February followed it. The said companies try to make their lofty shares more attractive to individual investors.
The news, announced via tweet, helped add more fuel to a recent rally in Musk’s Tesla shares. On Monday, the shares closed up 8% at $1,091.84, the highest level since January 12. The company is the top earner in the ‘Nyse Fang+ Index’ during the current year.
The last time Tesla company added its split stock was in August 2020. Its share price raised by a staggering 743% that year and often mentioned the split as one of the reasons at back of the gains.
Recent offers from Alphabet, Amazon.com, and Tesla companies indicate that stock splits can flash big rallies as retail traders pile in. Splits are causing day traders to pile in, fueling rallies in these shares of companies.
According to data from the brokerage firm, Musk’s Tesla was by far the most-purchased stock among Fidelity customers. According to Vanda Research, the announcement by Amazon attracted significant retail interest, and it was probably the biggest factor in the outperformance of stocks in a week when the Nasdaq 100 fell almost 4 percent.