Tesla shares slip as 3-1 stock split kicks in


Aug 25 (Reuters) – Shares of Tesla Inc (TSLA.O) fell Thursday as a three-for-one stock split, announced by the world’s most valuable automaker to chase retail investors, went into effect.

Shares of the electric car maker, led by Elon Musk, opened at $302 and fell to $293 in early trading.

Tesla’s second stock split in as many years follows that of other high-growth companies, including Amazon.com (AMZN.O) and Google parent alphabet (GOOGL.O), highlighting the increasing need for investor base diversification.

Register now for FREE unlimited access to Reuters.com

Stock splits “certainly have a greater appeal to retail investors and also make their options more affordable,” said Art Hogan, chief market strategist at B. Riley.

“Retail investors are a very important cohort for Tesla, and today’s stock split is essentially an acknowledgment of that fact.”

Austin-based Tesla debuted in 2010 at $17 and shares skyrocketed to trade at over $2,000 at their peak, making them one of the best priced on Wall Street and making it difficult for small investors to capitalize on the burgeoning market. to bet on shares.

In August 2020, the company decided to split its shares on a five-for-one basis and surpassed $1 trillion in market cap by 2021.

The stock closed at $891.29 on Wednesday before the three-for-one split took effect.

The EV maker is the sixth company in the S&P 500 index to split its shares this year, according to Howard Silverblatt, senior index analyst for S&P and Dow Jones indices.

Tesla’s ticker was trending on social media stocktwits.com, indicating an increase in chatter among individual investors.

The company’s shares have fallen about 11% since the company announced plans to increase its share count in March.

“In the typical buy-the-rumor, sell-the-new style, investors tend to drastically scale back split share purchases in the weeks following the effective split date, slowing price momentum,” Vanda analysts said. Research in a note. .

Tesla shares have surged to push company’s market cap to over $1 trillion since last split

A stock split doesn’t affect a company’s fundamentals, but makes it easier for individual investors looking to make small trades. However, the benefits of stock splits become less apparent as brokers allow clients to buy portions of a company’s stock.

Shares of Tesla have fallen about 16% this year as concerns about aggressive US interest rate hikes and geopolitical uncertainty prompted a sell-off of high-growth stocks.

The latest three-for-one split means shareholders will receive two additional shares for each they owned starting August 17.

Register now for FREE unlimited access to Reuters.com

Reporting by Akash Sriram and Medha Singh in Bengaluru; Additional reporting by Devik Jain; Editing by Sriraj Kalluvila

Our Standards: The Thomson Reuters Trust Principles.

The Valley Voice
The Valley Voicehttp://thevalleyvoice.org
Christopher Brito is a social media producer and trending writer for The Valley Voice, with a focus on sports and stories related to race and culture.


Please enter your comment!
Please enter your name here

Share post:


More like this

Dollar hits 20-year high as markets hunker down for higher rates for longer

U.S. dollar banknotes can be seen in this illustration,...

IAEA mission heads to Ukraine’s Zaporizhzhia nuclear plant near war frontline

UN watchdog visits reactor complex in Ukraine this weekIAEA...

2 high-rise towers in India demolished for violating laws

NEW DELHI (AP) - Two high-rise condominium towers in...

MLBPA sends out union authorization cards in first step toward unionizing minor leaguers

The Major League Baseball Players Association took its first...