Tesla shares jump 12% on first day of post-split trading

Aly Song/ReutersElon Musk.
  • Tesla stock jumped as much as 12% in its first day of post-split trading on Monday.
  • The electric vehicle maker announced August 11 that it would enact a 5-for-1 stock split, and started trading at the new price Monday.
  • Still, the automaker’s rally hasn’t slowed down. Shares are up more than 470% this year.
  • Watch Tesla trade live on Markets Insider.
  • Read more on Business Insider.

Tesla surged as much as 12% on Monday to $US497 per share in the company’s first day of post-stock-split trading, extending the automaker’s blistering rally.

The company announced on August 11 that it would enact a 5-for-1 stock split after its recent rally pushed shares above $US2,000 a piece. Since the announcement, Tesla shares have added more than 70%, even though a stock split changes nothing about a company’s underlying fundamentals.

Read more: 35-year market vet David Rosenberg warns the stock market’s rally features distortions that were glaring during the tech bubble – and lays out his plausible scenario for a crash

Still, the split may encourage more small investors who couldn’t afford the stock’s pre-split price.

“We believe the stock split decision was a smart move by Tesla and its Board given the parabolic move in shares over the past six months,” wrote Wedbush analyst Daniel Ives in a Monday note. He adjusted his price target on Tesla shares to $US380 with a bull case of $US700 and reaffirmed his neutral rating following the split.

Also on Monday, Apple shares gained after its own 4-for-1 stock split went into effect. It’s the company’s fifth stock split ever.

Tesla has gained more than 472% year-to-date.

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