Tesla CEO Elon Musk speaks during the unveiling of the new Tesla Model Y in Hawthorne, California on March 14, 2019.
Frederic J. Brown | AFP | Getty Images
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Tesla shares are rallying in premarket trading Wednesday on the heels of the electric car maker’s plan to split its equity five for one later this month.
And that’s left some analysts scratching their heads.
Stock splits do not impact the existing ownership of a company and do not change anything about the fundamental health of the company.
In fact — in the modern age of fractional trading where investors can buy portions of single shares — the long-term impact of a company’s decision to split its stock is increasingly negligible.
So with Tesla equity up 7% before the opening bell, some sell-side analysts ventured to explain why the stock is seeing such strength.