Interesting day in the stock market. Over the weekend, both Apple and Tesla did stock splits, giving 4 (in Apple's case) or 5 (for Tesla) shares for each share of pre-split stock. The idea is that more small investors can buy shares at a reduced price, increasing the demand for the stock and its overall market value.
It worked a bit too well. Apple's up 4.7% for the day on just that fact and Tesla is up just over 10%. Just two years ago, Elon Musk got into trouble tweeting that he has secured (prematurely, as it turned out) funding to take the stock private at $420/share. Today, the stock is trading at 486.90... after the 5/1 split! That's over $2400 an old share.
Musk is a fan of the wacky tobaccy and 420 somehow became ganja's number. To see Tesla increase in value seven fold since the tweet on not that much good news makes one wonder if Musk isn't the only one on mind-altering drugs. They seem to make good cars, and electric vehicles are the in thing with the CO2-phobic set, but there's a lot of faith in Tesla's ability to become the dominant car maker of the 2020s and 2030s.
The 21% jump in price in the last week seems like the kind of run up in price you see in a hot initial public offering, where the stock soars above the price the company agree to sell the stock for to the folks buying the stock from their investment banker. While it's a lot easier to buy odd lots (other than multiples of 100) than it was 40 years ago, there seems to have been an effect to reopen the stock to people who didn't have $2000 to plunk into a share of Tesla.
A second IPO is a contradiction in terms, but so is being born again. Apple and Tesla seem to have pulled it off today.
Recent Comments