Tesla’s stock split this week, which was though it felt more like a flex. Tesla’s stock price has soared so high that it simply had no other choice, you see.

Stock splits are usually non-events, but Tesla’s pushed its stock price even higher, show of force that it was. Tesla has, as of this writing, a market capitalization of $442 billion, which is almost as much as Visa.

And after four straight profitable quarters for the company, you’d be forgiven for thinking that Tesla was doing just fine in the money department except that on Tuesday Tesla said it planned to raise more money. Up to $5 billion to be exact, according to a . That money would come from the sale of more stock, and presumably, help pay for Tesla plants in Berlin and Texas as the company seeks to turn the volume even higher.

Tesla did , raising $2 billion then, in both cases timing the capital-raising with a surge in its stock price. The latest appears to be a strategy to in part target retail investors, which is what Wall Street calls nonprofessional investors—also known as amateurs—who buy stocks and gamble on the market.

Tesla was already a popular stock with retail investors before the pandemic, and a lot more people on stocks since the pandemic took hold.

From :

David Whiston, an analyst for Morningstar Research, said there will likely be many more factories requiring heavy capital spending, and with the run-up in its stock Tesla can tap what almost amounts to free money.

The shares have risen nearly sixfold this year, including a roughly 80% rise since the company’s stock-split announcement on Aug. 11.

Raising capital over time is a good way to involve retail investors, Craig Irwin, senior research analyst at Roth Capital Partners LLC, said. “They’re going to sell $5 billion of their stock into the open market from time to time for a much smaller fee than they would if they sold straight equity in a secondary [offering].”

Tesla is, in other words, very much riding on its own momentum and its own emotional appeal to investors that may not be able to make a sound business case for it. Not yet anyway. Their argument, as far as I can tell, is not to worry about the business case just yet. Tesla, they say, will get there eventually. You’ll see.