Tesla’s stocks crossed $2,000 (Dh7,340) a share mark for the first time on Thursday as investors continued to rally on the electric vehicle manufacturer’s stock split announcement.
The California-headquartered company’s shares closed up 6.6 per cent at $2,001.83 in New York - an all-time high. Its stock has closed at record levels on four of the past five trading days.
On April 11, it announced a five-for-one stock split, with shareholders receiving four additional shares for each share they own. It will go into effect on August 31.
Splitting their stocks is a tactic for firms to make it less expensive to buy individual shares, potentially attracting retail investors who make small trades.
It significantly lowers the cost of an individual share and draws small investors who may have stayed away from buying due to a high price tag.
“Tesla has a very large retail investor following … and the stock split essentially lowers the bar for small investors,” Deutsche Bank’s Emmanuel Rosner, who leads autos and auto technology sector, wrote in a note to clients.
Last month, Cupertino-based Apple had also approved a four-for-one stock split to make the stock more accessible to a broader base of investors.
Tesla's shares have climbed more than 360 per cent since January 1, when they were trading at $430.26. Its current valuation is about $373.1 billion, while Walmart is hovering around $369.8bn, according to Bloomberg data.
Among EV manufacturers, Tesla continued as market leader last year, with 370,000 units sold globally, for a market share of about 16 per cent, up from 12 per cent in 2018, according to McKinsey’s EV index.
Tesla’s stocks could be worth $6,000 per share in the next five years, according to Catherine Wood, founder of the New York-based financial services firm Ark Investment.
This bullish prediction is based on the grounds that Tesla “will not considerably lose its market share”, she said earlier.
Tesla’s billionaire chief executive Elon Musk is now the world’s fourth-richest person after the last week’s stock surge boosted his net worth by more than $9bn.
Mr Musk’s $90bn fortune puts him within $10bn of Facebook founder Mark Zuckerberg, number three on the ranking of the world’s 500 richest people, according to Bloomberg Billionaires Index.
His fortune has grown by $57.2bn this year, the second-biggest increase on the index after Amazon founder Jeff Bezos’s. The world’s richest man has accumulated $73bn in 2020 and is now worth $192bn.
