Tesla: stock split also attracts small investors13. August 2020
Tesla: stock split also attracts small investors
New York, August 12, 2020
The electric car manufacturer Tesla has announced a stock split. This will give the Tesla Rally a new boost.
Elon Musk has chosen exactly the right time to make the announcement. After all, investors showed only restrained interest in the stock in the past month. Now every Tesla shareholder entered in the share register on August 21 is to receive four additional share certificates as a dividend for each share, the company announced on Tuesday evening. This corresponds to a stock split in the ratio 1:5.
The stock split is scheduled to take effect after the closing bell sounds on Friday, August 28. On Monday, 31 August, trading is then to begin on a basis adjusted to the share split. At the regular close of trading on Tuesday, one Tesla share cost $1,374.
What does this stock split mean? First, the number of shares will be increased and they will become visually cheaper. This is particularly attractive for retail investors. That’s what Musk is after: A strong buying interest from these people.
Despite the Corona pandemic, the Tesla share has already gained strongly this year. Tesla’s market capitalization exceeds that of traditional large corporations such as Disney, Toyota or Coca-Cola. Since the beginning of the year, the share price has risen by more than 200 percent.
By the way, Musk is not alone with his announcement of a stock split in the near future. Apple also announced such a step last week, after the stock had soared by more than 45 percent this year.