Stock Splits: 7 Companies That Should Follow Tesla’s Lead
The best known of the upcoming stock splits is Tesla (NASDAQ: TSLA ). It will split its stock today, Aug. 24, after the close of trading. The three-for-one split will reduce the electric vehicle maker’s share price to less than $300. It will be Elon Musk’s second stock split since the beginning of the pandemic. Tesla stock split five-for-one in August 2020. This means that for every share you held in March 2020, you’ll now own 15. Companies like Tesla split their stock, rationalizing that a lower share price makes it easier for retail investors to get on board. However, fractional shares make this argument nonsensical. And yet, they continue to happen, despite this reality. So, the question is, when does it make sense to split a company’s shares? I would argue that the best stock splits are those that have minimal share counts. After all, the more shares outstanding, the higher the liquidity . Some institutional investors can’t buy certain stocks because they have insufficient volume.
Stock Splits: 7 Companies That Should Follow Tesla’s Lead
The best known of the upcoming stock splits is Tesla (NASDAQ: TSLA ). It will split its stock today, Aug. 24, after the close of trading. The three-for-one split will reduce the electric vehicle maker’s share price to less than $300. It will be Elon Musk’s second stock split since the beginning of the pandemic. Tesla stock split five-for-one in August 2020. This means that for every share you held in March 2020, you’ll now own 15. Companies like Tesla split their stock, rationalizing that a lower share price makes it easier for retail investors to get on board. However, fractional shares make this argument nonsensical. And yet, they continue to happen, despite this reality. So, the question is, when does it make sense to split a company’s shares? I would argue that the best stock splits are those that have minimal share counts. After all, the more shares outstanding, the higher the liquidity . Some institutional investors can’t buy certain stocks because they have insufficient volume.