High-flying shares of Tesla Inc. surged again on Monday after its stock split took effect and attracted more buying from investors.
Tesla shares rallied another 12.6 percent to $498.32, elevating the EV market capitalization to about $464 billion, making it more valuable than blue-chip companies such as Walmart and Johnson & Johnson.
Tesla split its stock 5-for-1, joining Apple’s 4-for-1 split on Monday, with both companies saying they aimed to make their shares more affordable to individual investors. Apple and Tesla’s share splits applied to shareholders of record on Aug. 24.
Robinhood and other brokerages increasingly let customers buy fractions of individual shares, making the benefit of stock splits less obvious than in the past. Splits have become less common. Just three S&P 500 members announced splits in 2020, down from 12 in 2011, according to S&P Dow Jones Indices.
The success of the splits for Apple and Tesla could lead CEOs of other companies with high-priced stocks to consider their own splits.
Both Silicon Valley companies have massive followings among individual investors. In recent sessions, Apple and Tesla were the two most-traded stocks at Fidelity’s brokerage, with customers overwhelmingly buying.
Tesla’s stock has surged over 70 percent since its split was announced on Aug. 11.
Trading at over $2,000 on Friday on a split-adjusted basis, Tesla’s stock had among the highest price tags on Wall Street.
Tesla’s stock has jumped almost 500 percent this year, while shares of General Motors and Ford Motor Co. fell due to fallout from the COVID-19 pandemic.
