Tesla Motors CEO Elon Musk responds to the company’s first public offering on the NASDAQ market in New York June 29, 2010
Brendan McDermid | Reuters
Shares of Tesla closed 13.12% higher on Wednesday as investors continued to announce the five-for-one stock split.
The split changes nothing fundamentally to the forefront. It reduces the cost of an individual share. This may seem attractive to retail investors who may be scared by a high price tag, although investors can also buy fractions of a share for what they are willing to pay.
“Any value in the inventory created here is false,” CNBC’s Jim Cramer said on “Squawk Box.” “But I think the idea of getting newer, younger people involved in the stock market who are not just brainwashed to put money into index funds is great.”
Analysts have also posted the stock split as the reason for Wednesday’s bump.
“While stock distributions do not create value per se, and institutional investors are typically largely indifferent to them, Tesla’s share price reacted positively yesterday after the market closed,” Emmanuel Rosner of Deutsche Bank wrote in a note to customers. “This is likely because Tesla is following a very large retail investor, and the action gap is essentially lowering the bar for small investors.”
Tesla stock has increased more than 500% in the last 12 months. It traded at more than $ 1,560 per share on Wednesday afternoon.
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