Here's why Tesla shares are rising on a basically meaningless stock split

Tesla CEO Elon Musk speaks during the unveiling of the new Tesla Model Y in Hawthorne, California on March 14, 2019.
Frederic J. Brown | AFP | Getty Images

(This story is only for CNBC Pro subscribers)

Tesla shares are rallying in premarket trading Wednesday on the heels of the electric car maker's plan to split its equity five for one later this month.

And that's left some analysts scratching their heads.

Stock splits do not impact the existing ownership of a company and do not change anything about the fundamental health of the company.

In fact — in the modern age of fractional trading where investors can buy portions of single shares — the long-term impact of a company's decision to split its stock is increasingly negligible. 

So with Tesla equity up 7% before the opening bell, some sell-side analysts ventured to explain why the stock is seeing such strength.

More In Pro Insight

CNBC ProInsider buying: An energy sector board member picks up more than $4 million of stock
CNBC ProGoldman still likes the 'thematic ETF' market — and named the ones attracting money now
CNBC ProNYU's 'Dean of Valuation' explains why he's ready to buy Alibaba