Tesla announced the date for its long-awaited stock split in anSEC filingFriday afternoon.
Shareholders will receive two additional shares per each owned at market close on Aug. 24.
Tesla shares will then trade at the split-adjusted price when the stock market opens on Aug. 25.
The board of directors moved quickly to confirm the poll results and announce the stock split.
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Tesla (TSLA) closed at $864.51 on Friday.
What is a stock split?
A stock split divides existing shares into smaller pieces for greater accessibility.
This causes the total share count to go up and the stock price to go down.
In other words, consider the 3-to-1 stock split in regard to a stock priced at $300.
How do stock splits affect options?
Options are affected the same way shares are, assuming they expire after the day of the split.
This scenario gives you more flexibility in your choice to exercise or sell.
Why do companies split their stock?
A company may issue a stock split for many strategic reasons.
The stock also becomes more accessible to employees who receive stock-based compensation, like they do at Tesla.
There can be other strategic goals as well.
Companies with high share prices may not be admitted if they would disrupt the weighting too greatly.
Do stock splits raise the stock price?
Fundamentally, a stock split shouldn’t have an effect on the stock price.
Stock splits generally signal that the company is growing and confident.
How will Tesla’s stock split?
The split will be completed by the issuance of a share dividend to stockholders.
