Tesla announced a 5 for 1 stock split earlier this month which sent a spike in stock price. The leading EV Company made the announcement through the investors’ website Tuesday.
Tesla, Inc. (‘Tesla’) announced today that the Board of Directors 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.
This means that each Tesla shareholder will see an increase in their number of shares held by a factor of 5 but the share value will be adjusted accordingly.
This aims to reduce the price per share and “make stock ownership more accessible to employees and investors” as Tesla put it.
The stock split will take place on Friday, August 28 and the stock will resume trading the next Monday.
Surprisingly, it has not since stopped rising.
Tesla’s stock split is scheduled to take place on Friday, August 28 – meaning TSLA shareholders will have 5 shares for every share they hold next Monday, but the stock will trade at 1/5 of its value.
Tesla has long been one of the world’s shortest stocks, meaning investors are betting on the price going down by selling shares and expecting to buy them back at a lower price.
TSLA is now up 40% since the stock split was announced without any other major catalyst happening in the meantime. In comparison, since the announcement, Apple, who also announced a two-week stock split before Tesla, has been up 20 percent.