Here’s what you need to know if your stock is splitting into two (or three, or four, or five).
A stock split does exactly what it does sounds like: A share is divided into multiple shares, with no change in the total value of investor properties. They are simply divided into more individual units.
So who benefits from a share split?
Reducing a company’s share price can place its shares within the reach of smaller, individual investors. This is good for the liquidity of the company and creates more demand for its shares.
The price change will be more dramatic at Tesla, whose shares were trading at more than $ 1,500 a share on Wednesday. Its 5-for-1 split, also set for Aug. 31, will bring an individual share in the $ 300 range.
This is not yet exactly cheap, but it has already been a boon for both companies, whose stock values have risen even further since announcing their moves.