What does the number 2 have to do with Tesla (TSLA)?
On 4th August 2022, Tesla shareholders confirmed and announced it’s 2nd stock split at 3-for-1 in just 2 years. Tesla shares were trading at $925 on the day of Tesla’s annual shareholder meeting for 2022. The stock split is expected to take effect later in August.
A stock split doesn’t influences a company’s value, it makes it more affordable for retail investors. Stock splits increase the number of outstanding shares while simultaneously decreasing the cost of each share.
At a 3-for-1 split, the new share price is estimated to be at around $300 range post-split (based on the current $800-900 share price).
Let’s look back in 2020 and forward in 2022
Back in August 2020, Tesla made it’s 1st stock split at a 5-for-1 ratio. For every one share, the shareholder gains additional four shares; thereby making it 5 shares total.
It was trading at $1568 when the share split in August 2020. After the split, it became around $310 per share.
Since then, the share price has increased 175%!
If a investor had bought 1 share pre-split in 2020 and held on with the 5 shares until the next split in August 2022, the investor will gain 10 shares. That’s a 10-for-1 stock split. This is due to the 3-for-1 share split, because for every 1 share, the investor gains additional 2 shares.
Hence, 10 shares in 2 years from 2020 to 2022.
This is not financial advice. Do your own due diligence and invest at your own risk. Invest safely.