Tesla obviously relies on cosmetics: the company wants to make its shares look cheaper and therefore announces a split. What does this mean for investors?
US electric car maker Tesla has announced a stock split to make its shares cheaper for small investors. Tech billionaire Elon Musk’s company announced in the United States that its board of directors will approve a three-for-one split if shareholders approve it at its annual meeting in August. Tesla had already announced in March that it was planning a split. Until now it was not clear in what relationship.
Stock splits do not actually change a company’s stock market value, but they reduce the price per share. Stocks can thus become more attractive, especially for small investors, although many brokers already offer to buy shares in proportion. Read more about this here.
However, the measure is highly regarded by companies: other large US companies such as Google’s parent company, Alphabet or Amazon, have already announced the stock split this year.
Tesla shares have been under pressure recently during the general downturn in the stock markets. The price has dropped more than 40 percent from last November’s highs. The stock closed at $ 696.69 on Friday. In the event of a split, a share should therefore cost less than $ 200 in the future.
The announcement of the stock split initially caused slight price increases after the trading session. Tesla also announced in the announcement that Oracle founder Larry Ellison wanted to step down from the board of directors.