By Collin Brantmeyer

Tesla's Stock Split: A Boon to Retail Investors

By Collin Brantmeyer

July 7, 2023 at 6:50AM

Tesla's recently completed stock split is a boon to everyday investors who don't have access to the same resources as institutional investors. By making its shares more affordable, Tesla is opening up its ownership to a wider range of people.

A stock split is a corporate action in which a company divides its existing shares into a larger number of shares. This has the effect of making each share more affordable, while not changing the overall value of the company. In Tesla's case, the stock split was a 3-for-1 split, meaning that each stockholder received two additional shares for each share they already owned.

There are a number of reasons why companies decide to split their stock. One reason is to make their shares more affordable to retail investors. When a company's stock price gets too high, it can become difficult for individual investors to purchase shares. A stock split can help to make the shares more accessible to these investors.

Another reason why companies split their stock is to increase liquidity. A stock split can make it easier for investors to buy and sell shares, which can lead to increased trading volume. Increased trading volume can make it easier for investors to get in and out of positions, which can lead to higher returns.

Tesla's stock split is a positive development for the company and its shareholders. By making its shares more affordable, Tesla is opening up its ownership to a wider range of people. This can lead to increased liquidity and higher returns for shareholders.