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Elon Musk's Tesla makes major slash to share prices in bid to become 'more accessible'


Shares in the US electric vehicle manufacturer have rocketed in recent weeks, making Tesla the highest-valued automaker in the world. Tesla’s per-share value closed at $1,374.39 on Tuesday – giving the firm a total market value of $256.1 billion.

This is down more than $100 since the same time last week – but analysts say the high price is still unattainable for many people to buy into unless they want fractions of a single share rather than a whole one.

However, Tesla has announced its shares will undergo a five-way split on August 28th.

The company said: “the Board of Directors has approved and declared a five-for-one split of Tesla’s common stock in the form of a stock dividend to make stock ownership more accessible to employees and investors.

“Each stockholder of record on August 21, 2020 will receive a dividend of four additional shares of common stock for each then-held share, to be distributed after close of trading on August 28, 2020.

“Trading will begin on a stock split-adjusted basis on August 31, 2020.”

The firm’s CEO Elon Musk has not commented on the move.

The split means the price of each share in the company will be reduced by 80 percent.

It means the prospect of buying a full share rather than a fractional one could become easier for some potential investors.

READ: Elon Musk warns AI will overtake humans ‘in less than five years’

However, analysts say splitting shares could make trading easier, because it is easier to trade full shares between stockbrokers than it is to trade fractional ones.

It is unclear what the resulting share price will be when Tesla’s split stock begins trading at the end of the month – it depends on what happens to the price in the meantime.

Tesla is not the only firm to have announced a stock split in recent weeks.

At the end of July, Apple announced a four-way share split at a time when each share was worth around $385.

Prices rose sharply after the announcement, closing at $437.50 yesterday.

It was Apple’s fifth stock split since the firm started trading publicly. The first was on June 16, 1987.

Tesla’s share prices have risen quickly in recent months. Towards the end of June, each share of the firm was worth around $1000.

Less than a month later, it had hit a high of more than $1,640.


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