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Tesla’s market cap rises $84 billion after Elon Musk makes an announcement that is considered a “master of market psychology”

Tesla’s market capitalization increased by $84 billion after the trading session on March 28. This number is larger than the market capitalization of Ford Motor. The upswing came after the electric-car maker said it was planning a second stock split in about two years.

Tesla capitalization rises $84 billion after Elon Musk makes an announcement that is considered a

Stock splits have been a prominent activity for large companies in recent times. Earlier this month, Amazon also said it would split shares at a 20:1 ratio, and Alphabet announced a similar plan in February. The move shows that businesses are working to help the stock with the price. Their highs become more attractive to retail investors.

The news of the Tesla stock split was posted via a tweet and helped “refuel” the stock’s recent rally. Tesla is the stock that has recorded the strongest momentum in the NYSE FANG+ Index this year. Closing session on March 28, Tesla shares rose 8% at $ 1,091.84 – the highest level since January 12.

Tesla capitalization increased by $84 billion after Elon Musk made an announcement that he is considered a master of market psychology - Photo 1.

Tesla stock performance after major milestones: 5:1 stock split, inclusion in the S&P 500 basket and announcement of a second split.

The last time Tesla conducted a stock split was in August 2020. During that year, the electric car company’s stock price increased by 743%, and the split is believed to be the main factor driving this development.

Although Tesla’s plan is still not very detailed, but below are the comments of some fund managers, strategists and analysts.

“This move adds to the hotness of the Tesla name. We are giving the stock a buy rating,” said Sam Stovall, chief investment strategist at CFRA. , we are optimistic about Tesla’s performance over the next 12 months. With the stock split and the announcement of the dividend, Tesla’s appeal to the profit-oriented investor is increasing.”

Marc LoPresti, managing director of The Strategic Funds, said: “A lot of people see this as a classic example of market psychology. If you look back at what’s been going on, businesses have done well – or absolutely brilliant, both announced a stock split. In this case, Elon Musk has been excellent at capturing sentiment. He’s one of the masters of market psychology.”

David Trainer, CEO of New Constructs, said: “Tesla’s desire for a stock split doesn’t change the fact that its stock is trading at a price point completely unrelated to the fundamentals. This split will cause a significant drop in Tesla’s stock price – which will certainly appeal to retail investors, which could also further inflate the Tesla stock bubble that has formed over the past few years. the past two years.”

According to Daniel Ives, an analyst at Wedbush, it is not surprising that the company is preparing for another split, especially given the high demand for electric vehicles and the construction of large factories. in Berlin and Austin is being actively implemented. “We consider this move by Tesla – after Amazon, Google and Apple, and the second fork in two years to be a smart strategic move. It will be a positive catalyst for the stock,” he said. future electric car company coupons.”

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