Tesla Motors CEO Elon Musk reacts after the company’s initial 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 rally on the company̵
The division does not change anything fundamental about the stock. It reduces the cost of an individual share. It may seem attractive to retail investors who may have been intimidated by a high price tag, although investors may also buy a fraction of a share for what they are willing to pay.
“Any value in the stock created by this is false,” CNBC’s Jim Cramer said on “Squawk Box.” “But I think the idea of getting new, younger people involved in the stock market who are not just brainwashed to put money in index funds is fantastic.”
Analysts also fixed the stock split as a reason for Wednesday’s inequality.
“Although share splits do not create value per se and institutional investors are generally largely indifferent to them, Tesla’s share price reacted very positively yesterday after the market closed,” Deutsche Bank’s Emmanuel Rosner wrote in a note to customers. “This is probably because Tesla has a very large retail investor to follow, and the stock split is essentially lowering the bar for small investors.”
Tesla shares have risen more than 500% in the last 12 months. It is trading at more than $ 1,560 per share from Wednesday afternoon.
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