The stock will begin trading on a split-adjusted basis on August 25th.
Stock splits are usually done to increase a stock’s liquidity, making it easier for investors to buy and sell the shares. Essentially, the move will triple the number of Tesla shares on the market, but the company’s overall valuation — and the value of each investor’s holding — won’t change. Splits can also boost demand for a stock because it puts the price within the reach of smaller, individual investors.
Although deep-pocketed institutional investors don’t care as much about the company’s overall stock price, individual investors might be turned off by high-priced shares. The growth of zero-fee trading apps, including Robinhood, E-Trade and others, have made stock splits much more important in recent years.