Shares of Tesla (TSLA) are on the rise on Wednesday after the electric car maker announced a five-for-one stock split "to make stock ownership more accessible to employees and investors." Commenting on the news, Wedbush analyst Daniel Ives called it "a smart strategic move at the right time."

STOCK SPLIT: On Tuesday, Tesla announced that the board has approved and declared a five-for-one split of Tesla's common stock in the form of a stock dividend to "make stock ownership more accessible to employees and investors." Each stockholder of record on August 21, 2020 will receive a dividend of four additional shares of common stock for each then-held share, to be distributed after close of trading on August 28, 2020. Trading will begin on a stock split-adjusted basis on August 31, 2020.

'SMART' STRATEGIC MOVE: In a research note to investors following the announcement, Wedbush analyst Daniel Ives noted that Tesla is following the lead of Apple (AAPL), adding that he ultimately expects more tech giants to potentially head down this path over the coming months as the parabolic rally in tech and electric vehicle names over the past five months has put companies in a position of strength to make such moves.

For Tesla, given its strong retail base and growing appetite among investors around the story and overall Electric Vehicle demand, Ives believes this is a "smart strategic move at the right time" for the board to make. Further, the analyst thinks that with demand for the Model 3 ramping stronger than expectations in China heading into August/September, the lockdown easing in the U.S./Europe, and some potentially "game changing" battery developments on the horizon, Tesla's stock likely has room to run further.

While the stock has been "rock solid," Ives believes the main fundamental catalyst continues to be the "massive" China market, which is showing clear signs of a spike in demand for Tesla heading into the rest of this year. He kept a Neutral rating and a price target of $1,800 on the shares, with a $2,500 bull case target.

Also commenting on the news, Baird analyst Ben Kallo argued that the split should make the shares more accessible for employees and retail shareholders, which he views as recognition of the fact the market is increasingly influenced by individual investors, including those looking to gain exposure to next-generation transportation trends. Kallo maintained his Neutral rating and $1,658 price target on Tesla shares, noting that he will review the latter ahead of the share split.

PRICE ACTION: In morning trading, shares of Tesla have gained almost 8% to $1,478.70.