You might feel that stock splits happen too much these days, but then again these are meant to help you. Most companies are now doing this to make their shares more accessible to investors, and Tesla looks to be the next one up. You might be confused as it feels like Tesla just split their shares, and you are correct. 2 years ago, Tesla performed a 5-1 stock split that brought its share price to around $400 from a whopping $2,000, during the crazy COVID mania that sent growth stocks soaring. The EV company hasn’t stopped there, reaching a price of $1,200 in November before falling with the broader market. Currently, shares sit at $925, which is still wild, and a decision had to be made at the annual company meeting on Thursday.
Board members approved a 3 for 1 stock that would take the shares down to the $300 range, but we are not sure when this will go into effect. However, last time they split it went into effect around the end of August, which could be a clue. Tesla said the objective is to make the stock affordable, and now might be the best time due to the prowess of renewable energy in the last few months. Tesla’s meeting was filled with many decisions, but this proved to be the biggest for investors. More volume might come their way now, and other businesses could hop on the bandwagon. Some companies that could be possible split candidates are MercadoLibre and Chipotle, with both companies’ share prices exceeding $1,000.
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.