The price of Teslashares becomes a lot cheaper. It will soon go from $900 to $300 per share. Is this a huge discount or is there a catch?
During the annual meeting of shareholders, a so-called ‘stock split‘ approved. All Tesla shares are split into three. Tesla now has approximately 1 billion shares. After the stock split, this will be 3 billion shares. If the price per share did not change, the stock market cap or “market cap” (the number of shares times the price per share) would rise from about 1 trillion to about 3 trillion. To avoid this, divide the price per share by 3: from $900 to $300.
What is a stock split and why is Tesla doing it?
So why a stock split? Fundamentally, nothing changes: Tesla’s total market value remains the same. It’s mainly to help people like you and me. $900 can be too much to pay for a share, $300 is not. What will be the effect on the price of Tesla then? Between the announcement of the previous stock split in August 2020 and its execution, the stock rose 80% in 3 weeks and then fell 30% in 1 week. Will that happen now? I do not think so. Tesla’s stock market value is now much higher than it was in August 2020. And the price has also risen 50% since May 2022. We may rise a little further. And possibly fall hard again after the execution of the stock split. The stock split will take place at the end of this month. And you don’t have to do anything for this stock split.
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