Tesla announces 5-for-1 stock split as shares continue to rip higher

• Tesla on Tuesday announced a five-for-one stock split effective August 31.
• At the close of trading on August 28, shareholders will receive five shares for every one they own.
• At Tuesday's prices, the new stock price would be about $274 per share.

Tesla said Tuesday that it was pursuing a five-for-one stock split following a massive rally in its share price this year.

At the end of trading on August 28, Tesla said in a press release, each shareholder will receive four additional shares for every share they own. Those shares will begin trading on August 31. At Tuesday's prices, that would value shares at about $274. Stock splits do not affect a company's market value, only the individual share prices.

Tesla's stock has been on a tear for most of 2020, as excitement around growing electric-vehicle sales and possible inclusion in the S&P 500 index entice new investors despite a global slump in equities prices amid the coronavirus pandemic. The rally has left Tesla as one of the most valuable automakers, despite the company making a tiny fraction of the industry's total output.

Shares rose as much as 6% in late trading Tuesday after the split was announced.

CEO Elon Musk appeared to get the idea from Twitter in late June, when a user suggested it as a way for more fans to buy single shares.

Tesla's move follows one from Apple, which on July 31 announced a similar stock split, the fifth in its history.