In the history of Tesla stock (symbol: TSLA), there has been 2 stock split to date. The most recent stock split for Tesla took place on August 25th, 2022.
The world’s most famous electronic vehicle company Tesla has announced a 3-for-1 stock split. Tesla’s stock has been on a rollercoaster since last month. Tesla shares are set to split for the second time in the past two years. The company had been proposing a possible split since early this year, which was approved by shareholders during the company’s arrival meeting on August 4, 2022.
Tesla Stock Split History
|25 August 2022||3:1||x15|
|31 August 2020||5:1||x5|
Statistical Analysis of Tesla Stock Split
At its first attempt to split the shares, this well-acclaimed firm profited 81% during the post-announcement and pre-split period in August 2020. The following month, Tesla witnessed a drop in its shares by 14%, which was compensated in the next six months as it rose by 36% after the split.
The stock split touched the realm of life after the market shut on the 24th of August in 2022. The market closed that day with the share price at $891.29. The very next day, Tesla traded the shares at the rate of $302, and the market closed with the share price at $288.09 on 26 August 2022. The per annum target of the company is set to reach a stock price rate of $306.10.
After-effects of Tesla Stock Split
The stock split does not influence the cornerstones of a firm but provides easy ground for investors to invest their money. Tesla’s split will make the shares more affordable for the investors as the price cuts down with a split. According to Lindsey Bell stock split “drives more interest in the shares, and more interest means more people are trading the stock.”
The shares are to be split on a 3-for-1 basis, meaning investors will receive an additional two shares for each share that they already own. The company also processed another stock split on a 5-for-1 basis in August 2020. In the stock split of August 2020, the stock price was around fifteen hundred dollars per share while, in August 2022, the second time the EV company has split its stock price to approximately nine hundred to one thousand dollars per share.
Why is Tesla splitting its share?
Tesla is splitting the shares to make sure that it’s affordable, and it increases the number of shares available for the investors at the same time, decreasing the cost of each share.
How many extra shares will you own?
The number of shares held in your portfolio will increase by a factor of three. For instance, if you bear ten shares of Tesla at $890 per share as of this past week, you will own 30 shares of Tesla held at $296.67 per share ( a third of the previous price)
Will there be a further stock split?
Investors are already looking forward to the next split because it allows more retail investors to buy Tesla shares, and they are eager for the next split.
How does a split stock work?
A stock split is a joint decision and its application by a company’s board of directors that amplifies the number of vacant shares. This is achieved by dividing each share into multiple ones by dividing its stock price. However, it should be noted that a stock split does not affect the company’s market price.