The company won shareholder approval for a 3:1 stock split, the second such move in less than two years, as it looks to make its stock more affordable.
Since June, when the proposed stock split was announced, the stock has gone up over 30%.
After the company's shareholders approved the 3:1 stock split, shares of the company continued to rise in after hours trading.
The 3:1 stock split was announced in June in order to make the $925 stock more affordable.
Since the last stock split in August 2020, the electric vehicle maker has seen its shares surge more than 2000%.
Stock splits don't impact a company's market value, but evidence suggests that by making shares more affordable to retail investors, the move can provide a short-term boost to share price
Since the 3:1 split was announced in June, shares of the company have increased in value by over 30%, while news of the 5:1 split sent shares over 70% higher.
Several other major tech companies have announced stock splits this year and have seen their share prices go up.
Lindsey Bell, Ally's chief money and markets strategist, said that everyday investors can more easily afford a piece of the company if the stock trades in a comfortable range. More people trading the stock is a result of that.
The second quarter earnings were mostly in line with analyst expectations. Production took a hit, however, as the company was impacted by supply chain disruptions and a factory closing in China due to Covid-related government lockdowns. The company saw its revenue rise 42% from a year ago, but it fell from a record high in the previous quarter.
Citigroup analysts maintain a "sell" rating on the stock with a price target of $424. Considering that the few other companies that achieved a similar market cap did so by generating on average around $100 billion in annualized gross profit, it is difficult to see how the current valuation is sustainable.
Forbes has estimated the worth of Musk. He is the wealthiest man in the world.
The impact of the China Shutdown has had an impact on the shares of the electric car company.
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