Tesla stock is about to get much cheaper

Tesla stock is about to get much cheaper
The company announced Friday that its board of directors approved a 3-for-1 stock split First split since August 2020Shareholders must approve the split at the company’s annual meeting in August.
Tesla (TSLA) closed on Friday at just over $696 per share. If the split occurred today, her stock would be worth $232 a share.

Don’t worry, Tesla stockholders (who are pretty much everyone with a retirement account, these days) — your shares will still be worth the same value. You’ll hold 3 times more stock when all is said and done.

Companies split their shares for many reasons: splits They can place their shares within the reach of small individual investors. It helps companies gain liquidity and splits can increase the demand for company shares.

Although wealthy institutional investors do not care about the company’s total stock price, individual investors may be disengaged by high-priced stocks. The growth of no-fee trading apps including Robinhood, E-Trade, and others has made stock splits more relevant in recent years.

Tesla said it took these factors into account — as well as employees who get paid in the company’s stock.

“We believe the stock split will help reset the market price of our common stock so that our employees have more flexibility in managing equity, all of which, in our opinion, may help increase shareholder value,” Tesla said. regulatory deposit Friday. “In addition, since retail investors have expressed a high level of interest in investing in our stock, we believe that a stock split will also make our common stock more accessible to our individual shareholders.”
Tesla Announce plans to split in March, but did not announce the ratio. On Friday, it indicated that its share has risen by 43.5 percent since its last share split nearly three years ago, although shares have fallen by 30 percent since it announced those split plans. She might have planned to split her stake even larger if it hadn’t gone down so much.
This year, as big tech companies and the broader market have been hit by inflation and rising interest rates. But Tesla, in particular, has suffered this year in part due to CEO Elon Musk’s attempt to cash in on his huge stake in Tesla in order to Twitter buy. is even Sold $8.5 billion worth of Tesla stock To raise money to use for buying, which helped put downward pressure on Tesla’s stock price.
Other major tech companies have also recently announced stock splits to help boost their affordability and attractiveness to mainstream investors. Amazon (AMZN) 20 in 1 stock split It came into effect on Monday. Alphabet you own The Google (The Google), also approved a 20-for-1 split that will take effect in July. Online retailer Shopify (a store) It has a 10-for-1 stock split scheme later in June, while GameStop has proposed a stock split as well.
Tesla’s move may also aim to be included in the popular Dow Jones Industrial Average, which tends to include less expensive stocks. apple (AAPL)For example, it announced a 7-for-1 stock split in 2014 and was included in the Dow Jones Index in 2015.

This split does not guarantee that it will be included in the Dow, but the index may wish to be the world’s most valuable auto company and a leader in electric vehicles.

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Tesla shares are up 1% in extended trading.

Tesla also announced that Larry Ellison, Chairman of the Board of inspiration (ORCL) He decided to leave the painting. Ellison has been a member of Tesla’s board of directors since December 2018.
Splitting stocks of large corporations has become very popular in recent years. But one company with an alarmingly high share price has never split and said it never will: Berkshire Hathaway (puddles).
At $439,780 per share, Berkshire shares are inaccessible to most retail investors. This is why it offers Class B shares (BRKB)which has split in the past, for just under $292.

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