What Does Tesla’s Stock Split Mean For Investors?
Tesla Inc (NASDAQ:TSLA) shareholders have approved a 3:1 stock split, with an ex-distribution date of Thursday, August 25th, 2022. All shareholders as of the market close on Wednesday, August 24th, will be subject to the stock split.
Will The Tesla Stock Move Higher After The Split?
Scott Sheridan, market expert, and CEO of tastyworks comments:
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“After the close today, Tesla will split 3 for 1. In terms of valuation, that should mean nothing. Instead of one share worth $900, you’ll have three shares worth $300 each. However, companies will often split their stock in hopes the lower price will bring more demand, pushing prices higher.
There are a number of instances where that has worked. Amazon recently did a split, and the stock has had a nice run after. Then there are instances where it doesn’t work as well. Take Alphabet, for example, where the stock really hasn’t gone anywhere.
Aside from having more stock or more options contracts, it’s really hard to say what this split will mean definitively.
If history repeats itself, then it’s entirely possible Tesla stock will move higher. But there are countless examples of companies going back to the well with stock splits one time too many.”
About tastyworks
tastyworks is an online brokerage platform built specifically for options traders. The up-and-coming online broker is a subsidiary of tastytrade, one of the fastest growing online financial networks in the world.
Source valuewalk
