Having been unprofitable for a long time, Tesla did not attract the attention of large institutional investors, the success of its shares on the stock market was explained by the enthusiasm of private buyers. Following Apple's lead, the electric car maker will conduct a stock split that will make it more accessible to individual investors.
To all Tesla shareholders registered as of August 21, to each share of the company already held four freshly issued securities each, which they will receive on August 28. Trading after the split will resume on August 31st. As already explained in preparation for a similar maneuver by Apple, the split does not change the overall capitalization of the company and the share of a particular shareholder in the capital. It's just that the total number of shares increases, splitting the capital into smaller parts.
Tesla's announcement of intent sent the company's share price up 6,52% to $1464. Assuming it stays the same until August 31st, the new share price would be around $293. Theoretically, investors with smaller budgets would be more willing to buy Tesla shares after the split. Experts explain that nowadays some brokerage houses allow investors to buy fractional parts of shares, so the importance of splits is no longer relevant. Tesla's quarterly report proved the company's ability to break even for several quarters in a row, this will allow its shares to be included in the S&P 500 index. Splitting should not affect the decision to include shares in this index.
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Source: 3dnews.ru