Tesla to split stock 5-for-1 at the end of August

Daniel Fowler
August 14, 2020

Tesla's market capitalization now stands at $256 billion, the stock has surged over 7,000% since listing on the bourses.

At the close of trading August 28, Tesla shareholders will receive four additional shares for every share they own.

At Tuesday's prices, the new stock price would be about $US274 per share.

Tesla said that its Board of Directors has approved and declared a five-for-one split of Tesla's common stock in the form of a stock dividend to make stock ownership more accessible to employees and investors. The company follows Apple in making such an announcement, after the iPhone manufacturer earlier last month said it would split the stock 4-for-1. Then again, that hasn't exactly put off many people so far: last month, almost 40,000 traders who use Robinhood's investing app bought Tesla shares in one four-hour window (tweet this).

A stock split could take Tesla's stock surging higher, something that Apple has benefited from in the recent days. Those shares will begin trading on August 31.

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It seems August 2020 is a popular month for tech companies getting in on the stock splitting game.

It means the prospect of buying a full share rather than a fractional one could become easier for some potential investors.

While many institutional investors have avoided Tesla's stock in recent years due to a lack of consistent profitability, the company has a strong following among individual investors. Divide that by five, and you get a far more manageable $274.80 price (so you'll be paying a fifth of the price but it'll be worth just 20 percent of a current Tesla share).

Shares rose as much as 6% in late trading Tuesday after the split was announced. The first was on June 16, 1987. But by July 20, it hit an all-time high of $1,650 a share.

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