Tesla adds $84 bn in a day on stock split signal; more than Ford's m-cap

Tesla added about $84 billion to its stock-market value on Monday, more than Ford's market capitalisation, after the electric-vehicle maker said it is planning a second stock split in about 2 years

Tesla added about $84 billion to its stock-market value on Monday, more than Ford Motor’s entire market capitalisation, after the electric-vehicle maker said it is planning a second stock split in about two years.

Stocks splits for large companies have returned to the spotlight recently with Amazon.com saying earlier this month that it will do a 20-for-1 stock split, followed by Alphabet’s own plan announced in February, as these companies try to make their lofty stocks more attractive for individual investors. 

The news, announced via a tweet, helped to add further fuel to a recent rally in Tesla’s stock. The company is the biggest gainer on the NYSE FANG+ Index this year. On Monday, the shares closed up 8 per cent at $1,091.84, the highest level since January 12.  The last time Tesla split its stock was in August 2020. Its share price rose a staggering 743 per cent that year, and the split was often cited among one of the reasons that drove the gains. 

Recent proposals from Alphabet, Amazon.com and Tesla tell us one thing: Stock splits can spark big rallies as retail traders pile in. Splits are causing day traders to pile in, fueling rallies in these companies’ shares.

Tesla was by far the most-purchased stock among Fidelity customers on Monday, according to data from the brokerage firm. Amazon’s announcement attracted “significant” retail interest and was likely the biggest factor in the stock’s outperformance during a week when the Nasdaq 100 fell almost 4 per cent, according to Vanda Research.