In the first time in its history Tesla must split its stock so that more investors can purchase shares of the electric car leader following a meteorical rise in the market value of the vehicle.

The five-for-one stock split announced on Tuesday will not affect Tesla ‘s value, but will immediately reduce the share ‘s prices by 80% once it is done on August 31.

The sudden fall in value per share generates a wider universe of potential buyers which also mentally sounds like a stock is on sale. Such factors also spark rallies after the announcement of a split. For example, the share price of Apple increased 14% after the iPhone maker announced a four-for-one split less than two weeks ago.

Now Tesla seems to profit from the same phenomenon. Shares of the firm rose 6 percent to $1.459 in extended trading following the news of the split.

This is the first time that Tesla has exchanged its stock since a decade earlier, Palo Alto, California, an company was released at 17 dollars per share. Any investor who has bought an IPO price worth $10,000 and now has a stock value of around $860,000.

Tesla also reveals the relationship between the shareholding structure of a company and short-term business activities. For a long time , the company has been exposed to major short-selling pressures. This is also one of the shortest inventories on the market. A favorable inventory split price pressure, in the case of Tesla, a 7% increase, directly translates into a loss to current corporate short sellers. You will cover your place at a 7% higher price.

Improved shareholder ownership by retail shareholders could also impede future short sales. A company’s short-sellers must borrow stocks from an owner before they can cut it into the market. The major shareholders on the market are institutional shareholders such as mutual funds, passive index funds and hedge funds. Higher institutional shares will limit short-sellers’ supplies to stocks and effectively raise their costs for short-selling. Often retail shareholders may borrow stocks from their brokers, but it is much easier for large institutional shareholders to borrow. Was Tesla’s push inspired by this? We can’t be certain, only the time is going to tell.

Tesla’s ex-CEO and co-founder Elon Musk has been able to reverse a long history of losses through reporting four straight quarters of income.

Musk has qualified for two lucrative awards estimated at approximately $ 3 billion since May in the financial turnover of the company.