Shares in Tesla (NASDAQ: TSLA) jumped by more than 6 percent to close above $2,000 on Thursday and were up another 2% in pre-market trade on Friday, before the deadline for holders of Tesla stock to be eligible to get more shares under a five-for-one split announced earlier this month.
Tesla’s stock continued to rise on Friday afternoon, increasing by nearly 4% by 1pm EDT.
“Each stockholder of record on August 21, 2020 will receive a dividend of four additional shares of common stock for each then-held share, to be distributed after close of trading on August 28, 2020,” Tesla said last week, sending the stock rallying on the NASDAQ.
Even before the announced stock split, Tesla’s shares had been rallying in the spring and summer, to the point of Elon Musk mocking the short sellers and trolling the SEC in early July.
Later in July, Tesla reported a surprise net profit for the second quarter, beating analyst expectations and reporting its fourth consecutive quarter of net profits, despite factory shutdowns due to the pandemic. Four profitable quarters in a row make Tesla now eligible to be considered for inclusion in the S&P 500 Index.
The sales and profit figures, the inclusion in the S&P 500, the stock split, and the general surge of EV makers’ stocks in recent months pushed Tesla’s share price to new record highs this week.
Tesla’s inclusion in the S&P 500 could launch a new wave of buying of Tesla stock from fund managers that track the index and from passive investors, according to Credit Suisse, as carried by The Street.
Year to date, Tesla’s shares have soared by 378 percent, while Tesla’s stock is now 847 percent more expensive compared to the same time last year.
Tesla’s market capitalization of $373 billion as of close on Thursday exceeded Walmart’s $369.8 billion market cap.
Tesla’s short sellers also seem to have started to retreat. The number of shorted Tesla shares has dropped by 2.07 million, or by 16.3 percent, over the past 30 days, with shorts down $24.7 billion in 2020 mark-to-market losses, Ihor Dusaniwsky, managing director of data from financial analytics firm S3 Partners, tweeted on Thursday.
By Charles Kennedy for Oilprice.com