Shares of Tesla (TSLA) will now become more affordable to investors after the stock split takes effect. Tesla’s stock on a split-adjusted basis will begin trading on August 25, 2022. Every shareholder of Tesla as of August 17, 2022, will get 2 additional shares of common stock for every one share held. After the closing session on August 24, the additional shares will be credited to the shareholder account.
Also Read: Tesla stock begins trading at a split-adjusted price
Tesla stock price is quoting around $874.36 after the share closed 2.26% higher on August 23. TSLA shares are up by 14% and 41% over the last 1-month and 3-month periods. Over the last year, the share price of TSLA is up by 25 percent but is still down by 15.84 percent since January 2022.
Stock splits are popular among retail investors and help them add more to their portfolio and also bring in a new set of investors. As retail investors have expressed a high level of interest in investing in Elon Musk’s Tesla stock, the Stock Split will also make the stock more accessible to the retail shareholders.
Elon Musk holds 23.5 percent while The Vanguard Group holds 6 percent of Tesla’s shares. It remains to be seen how the stock price reacts once the share starts trading on a split-adjusted basis.
Prior to the Tesla stock split 2022, the company had enacted a 5-for-1 stock split in August 2020, after which TSLA shares began trading on a split-adjusted basis. After the previous stock split by Tesla, from August 2020 to June 6, 2022, Tesla’s stock price rose nearly 43.5%.
A 3-for-1 stock split of Tesla shares has already been approved by Tesla’s board of directors and the shareholder’s voting took place at Tesla’s 2022 Annual Meeting of Stockholders held on Thursday, August 4, 2022, at Tesla’s Gigafactory Texas.
A stock split has no fundamental change to the company’s financials other than increasing the number of shares that are outstanding by issuing more shares to the existing shareholders. After the stock split, the price falls, however, there is no change in the market capitalization of the company as the number of outstanding shares get increased.