Tesla Inc.shares will start trading Monday after a 5-for-1 stock split.
Shareholders of record as of last Friday will receive a dividend of four additional shares of common stock for each then-held share, to be distributed after the close this Friday.
Here are five things to know about the Silicon Valley electric-car maker ahead of the split.
A record stock run has boosted market cap to $409 billion
Tesla shares have gained more than 400% this year, hitting 33 record closes in the process. The stock reached the latest on Thursday, when it closed at $2,238.75 and notched an intraday record of $2,295.60.
The stock is up 56% in August, which is shaping up to be its best month since May 2013 and its third best month on record.
The stock rally has boosted the company’s market valuation to around $409 billion on Friday, and made it the eighth biggest company in the U.S. by market cap. Tesla’s market valuation places it between Dow Jones Industrial Average components Johnson & Johnson’s
and Visa Inc.
The latest string of records for Tesla came ahead of the stock split as well as a “battery day” that Tesla has set for Sept. 22. Wall Street views the event, a showcase of Tesla’s battery technology, as another potential catalyst for the stock.
Wall Street remains cautious on the stock, for the most part
For all the stock gains, most Wall Street analysts have a cautious view of Tesla.
Of the 36 analysts covering Tesla stock and surveyed by FactSet, 19% rate the stock a buy and 31% rate the stock a sell; the other 50% rate it a hold.
The average price target on Tesla is $1,288.87, or around 42% below its current level.
Tesla’s stock run has lifted the shares of other EV makers
These are heady days for shares of electric-vehicle makers, which several market observers pin at least in part on Tesla’s recent successes and ability to generate a fan base.
Massive investment flows have gone to EV companies such as Nikola Corp.
and X Peng Inc.
have soared post their initial public offering prices. EV maker Fisker Inc. has filed for an IPO.
Analysts at Deutsche Bank have called for General Motors Co. to spin off its electric-vehicle operations and capabilities into a stand-alone company, “which could force the market to recognize its robust EV technology and coming (vehicle) lineup,” they said in a note earlier this month. GM was said to be considering the option.
Wall Street expects S&P 500 inclusion soon
Tesla is slated to become part of the S&P 500 index
in the coming months.
The company cleared a major hurdle to index inclusion when it reported in late July its fourth straight quarterly GAAP profit.
Joining a major index would automatically get Tesla shares to the portfolios of thousands of index-tracking funds, and send managed funds scrambling to catch up with it as well.
What else changes on Monday?
Monday will bring changes for the Dow Jones Industrial Average
as well as the Apple and Tesla stock splits.
and Raytheon Technologies Corp.
are out as well, replaced by biotech Amgen Inc.
and industrial conglomerate Honeywell International Inc.
S&P Dow Jones said the changes were prompted by the Apple split, and energy investors have called Exxon’s removal from the index a “sign of the times.” Integrated energy company Chevron Corp.
remains a Dow component.