Tesla has announced a five-for-one stock split that will go into effect on August 28.
Tesla shares have been soaring since late 2019 and the split will make it easier for smaller investors to afford the stock. The five-for-one stock split means that Tesla shareholders as of August 21 will have each individual share split into five smaller shares. At the company’s current share price of $1,374.39, that means one share will become five shares valued at roughly $275 each.
On the back of this news, shares in Tesla soared after hours to as high as $1,485. The stock split could see the company’s share price soar even higher this year.
News of Tesla’s stock split comes just a couple of weeks after Apple announced a four-for-one stock split.
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Forbes notes that Tesla shares have more than tripled in value from $413.13 at the end of 2019 to $1,374.39. This comes despite the coronavirus pandemic impacting the automaker’s production facilities, in particular its Fremont factory in California.
Chief executive Elon Musk has benefited profoundly from the automaker’s surging share price. In fact, the second tranche of Musk’s pay package was recently met, meaning he will receive additional Tesla stock worth $2.1 billion.
What’s more, Tesla’s recorded its fourth consecutive profitable quarter in Q2, meaning it has fulfilled the requirements to be included in the S&P500. This could result in a big payday for investors if the company is added to the market’s biggest mutual funds and exchange traded funds (ETFs).
