Will the Tesla stocks rally continue amid its second stock split?

Tesla shares soared over 10% after the announcement was made, pushing it to achieve a 9-day winning streak. The company stock price is less than $200 per share from its all-time high of $1243.49.

When a company splits its shares, the market capitalization before and after the split takes place remains the same—just like a pizza got slices into pieces. Therefore, each shareholder would own more shares with a lower price per share.

A lower-priced stock on a per-share basis can often attract a wider range of investors. The market capitalization would rise post-split if that increased demand causes the share price to appreciate.

Tesla's stock-split announcement comes after it idled its gigafactory in Shanghai, which accounts over 50% of Tesla's total capacity. Although long-term investors might consider this more importantly: Tesla's gigafactory in Berlin has opened, adding an estimated 500,000 electric vehicles to the company's annual production capacity. In addtion, the company has recently started production at the new $1.1 billion manufacturing facility in Travis County, Austin.

The company projects annual sales increases of 50%or greater have driven incredible gains in market value. The consensus 2022 earnings-per-share estimate for Tesla, among analysts polled by FactSet, has increased 24% to $10.87 from $8.78 at the end of 2021.

Tesla said it would include more information, including the date and place of its annual shareholder meeting, in an upcoming proxy statement. The estimated time for the 2022 annual shareholders' meeting is around October.