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Tesla's soaring stock cracks $2,000 ahead of share split

Published 08/20/2020, 03:19 PM
Updated 08/20/2020, 07:40 PM
© Reuters. FILE PHOTO: The company logo is pictured on a Tesla Model X electric car in Berlin

© Reuters. FILE PHOTO: The company logo is pictured on a Tesla Model X electric car in Berlin

By Noel Randewich

(Reuters) - Shares of Tesla (NASDAQ:TSLA) Inc surged past the $2,000 mark on Thursday for the first time as the electric car maker extended its recent rally ahead of an upcoming share split.

The company's stock closed at a record high $2,001.83, up 6.6% for the day.

With many investors betting Tesla will be added to the S&P 500 after a strong quarterly report last month, the stock has surged over 300% in 2020.

GRAPHIC: Tesla's relentless advance - https://graphics.reuters.com/TESLA-STOCKS/oakpeozrgpr/chart.png

The stock has jumped 45% just since Aug. 11, when Tesla announced a five-for-one stock split, with shareholders of record on Aug. 21 receiving four additional shares for each share they own, distributed after the close of trading on Aug. 28.

Thursday's surge put Tesla's stock market value at $372 billion, greater than all but seven of the S&P 500's components.

Tesla's stock is among the highest priced, per share, on Wall Street, and the Palo Alto, California-based company has said it was looking to make its shares more accessible to employees and investors.

However, with Robinhood and other brokerages increasingly letting customers by fractions of individual shares, the benefit of stock splits has become less obvious, making Tesla's rally following the announcement of its stock split surprising to some professional investors.

Tesla's stock is currently priced at an exceedingly high 148 times expected earnings, according to Refinitiv, and that valuation will not be affected by the upcoming stock split.

Tesla will start rolling out "made-in-China" Model Y vehicles at its factory in Shanghai starting in 2021, the Global Times tweeted on Thursday, citing an unnamed executive.

Investors expect important announcements when Tesla holds its long-awaited Battery Day on Sept. 22, the same day as its annual shareholder meeting.

© Reuters. FILE PHOTO: The company logo is pictured on a Tesla Model X electric car in Berlin

The company is expected to present battery innovations, with analysts at Morgan Stanley (NYSE:MS) predicting a company announcement on supplying “superior” battery packs to the auto industry.

Latest comments

Buying Tesla shares Humans pays for healthier and safer life. Economic value was actual in hungry society. After Economics a Sustainability rise as mean for cover all set of human demands: biogenic, safety and health, communication, self-esteem and self-realisation (A.Maslow).
Tesla can still be king of profitability selling ecological credits to manufacteurs who decide to still not become green Cars manufacteurs yet and like that avoiding to get fine for that
Stonks go up!  Printer goes brrr!  Price to Earnings are sooooo old school!  The year 2000 was the market of our grandparents.  To the moon! /Sarcasm, but really, that's the market right now and it makes one wonder how long it'll last.
Will go down after the split..
lost +50k shorting tesla yesterday....never again, money just magically keeps pouring in from the ether
Should be $3000. What a disappoitnment! Lol! What a scam!
Tesla destroying bears left and right.
Will ANY authority investigate this S. C. A. M. or are all accessory to this scandal. Who is behind and don't tell me are Robin hood investors, please.
They reloaded the Tesla store with brand new limited edition flaming red short shorts.They're on fire.
https://www.mv-voice.com/news/2020/08/19/lightning-sparked-fires-spread-smoke-over-the-midpeninsula Palo Alto is burning, the air is THICK even 35 miles from there - not sure if they are still working there (or can) I certainly can barely stand it right now... Tesla didn't post an operating win in years (if you deduct the government subsidies uhm PAYROLL ASISTANCE !and! POLUTION CREDITS) and the stock hits a high (only because of a short squeeze) that is so crazy dragging the Nasdaq100 along woah!
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