About Tesla’s 3-for-1 Stock Split
Tesla’s Board of Directors announced approval for a 3-for-1 stock split on Friday, August 5, 2022. Tesla last completed a stock split in August 2020.
Stock splits issue additional shares to shareholders. With more shares issued, the price per share will reflect a lower amount. Importantly, while stock splits reduce the price per share, they do not intrinsically impact the stock’s value.
What does this mean for Tesla shareholders?
If you own 1 share of Tesla stock, following the 3-for-1 stock split, you gain an additional 2 shares at a new share price that is lower than the previous price per share. As an investor, following the split, you’d own 3 total shares versus 1, with the total value of your shares remaining unchanged.
For example: Say you own 1 share of Company X at a current price per share of $3,000. Following a 3-to-1 stock split, you would own 3 shares of Company X at a price per share of $1,000. The total value reflects the same amount you started with, but you now own more total shares.
If you own a fraction of a share, the same math applies. For example, if you own 0.5 of one share of stock (priced at $150), you will now own 1.5 total shares priced at $50 per share, with the same total value being $75.
The split will impact all investors who own Tesla stock as of market close on Aug. 24.
Please note that you may notice temporary inconsistencies in your portfolio charts, TSLA position value, and average price paid following the split on Aug. 25.
Following the split, you may receive a trade confirmation from our clearing agent, Apex, to verify the receipt of the additional TSLA shares. The confirmation will indicate the shares were received as a split.
To view your trade confirmations in your Public app:
1. Tap on Account Icon in the top left
2. Tap on Account Settings
3. Scroll to Documents and tap Trade Confirmations
Why do companies split their stock?
Stock splits are designed to make the cost per share for investors more affordable by increasing the number of shares and lowering the price per share. Stock splits had a greater impact on retail investor affordability prior to the advent of fractional shares because they made the price per one share of stock for expensive stocks more accessible for the average investor.
You can learn more about stock splits here.
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