Tesla announced after the closing of the market today that it will distribute stocks at a ratio of 5 to 1. Subsequently, its stock (TSLA) rose by 8% in after-hours trading.
Splitting stocks means that each Tesla shareholder will see their share holdings increase by a factor of 5, but the value of their shares will not change accordingly.
The purpose of splitting the shares is to lower the share price, as Tesla stated, making it easier for employees and investors to own Tesla’s stock and attracting more investors to enter the market.
The Tesla stock split is scheduled to take place on Friday, August 28th, with trading resuming on the following Monday.
Based on current stock prices, after the stock split, the price of Tesla’s stock will be approximately $290 per share.
This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email bd@42how.com.