Tesla Approves Five-For-One Stock Split Ahead of August Trading
Tesla announces a five-for-one stock split that takes effect on August 31, causing shares to jump over 6% in after-hours trading. The move comes as the automaker's stock more than triples year-to-date following its recent S&P 500 qualification.
Tesla announces a five-for-one stock split that takes effect on August 31, causing shares to rise more than 6% in after-hours trading. This split does not change the fundamental value of the company, but it lowers the individual share price to potentially attract smaller investors. However, major institutions remain the primary drivers of Tesla's market capitalization, and the rise of fractional trading already allows small traders to buy portions of expensive stocks.
The electric vehicle maker experiences massive growth in 2020, with shares more than tripling and gaining over 228% year-to-date. This surge follows Tesla's second-quarter earnings report, which marks its fourth consecutive profitable quarter and officially qualifies the company for inclusion in the S&P 500. Despite this recent rally, the stock currently sits roughly 23% below its all-time intraday high of $1,794.99 reached in mid-July.
Tesla's decision mirrors a recent trend among major technology companies, as Apple announces a similar stock split just days earlier on July 30. These splits reflect a wave of corporate actions designed to increase stock liquidity and make high-flying shares more accessible to retail traders. Analysts continue to watch Tesla closely, with some maintaining price targets well below the stock's current trading levels.