Another big name in the market has decided to make its stock more accessible to the daily investor.
And that big name is no different Tesla Inc. (NASDAQ: TSLA).
Tesla has indeed had an impressive run. Despite many analysts claiming its downfall, the electric car stock has continued to flourish, reaching new heights and continuing to climb daily. In fact, shares have more than doubled since March – closing at one point above $ 1,600.
The company has long been a favorite stock for both day retailers and for some retailers. For example, just last month, Robinhood revealed that nearly 40,000 active account holders had added shares of the automaker in a four-hour period.
And it is not just Tesla that has enjoyed this power. Investors are becoming increasingly interested in the electric car sector. But Tesla is the only company in the industry that is on the radar of the S&P 500, with many hoping that it will soon be added to the coveted list. If this happens, it will make Tesla a “must buy” for mutual and exchange traded funds that follow the index.
So here we can indulge in the monetary pleasure – and today pay only a fifth of Tesla’s costs …
TSLAs 5-for-1 Deal: Where’s the Money?
With Tesla’s high price tag, it can seem almost unattainable – especially considering how it climbs daily. However, the company made a recent announcement, and the goal is to make the stock more accessible to the daily investor.
After the news that it had officially become the most valuable motorist in the world, Tesla revealed that it would do a 5-for-1 split.
What this means is that on August 21, each shareholder will receive a dividend of four additional share shares for each who owns them. Following the announcement, TSLA stock rose 9.3% when investors advised to get a piece of the electric car manufacturer for the split.
I think sharing parts is the best thing TSLA could have done.
Indeed, any single value above $ 400 must make a stock split to get its price below $ 100. Because market capitalization is the same, retail investors see a smaller price tag, allowing them to own a piece of the business.
And it has been proven that in many cases the stock moves higher after a split of the stock, because the cheaper price tag obviously attracts an influx of interest.
That, Tesla, I tip my hat to you.
With that said, I have always considered the world’s top producer of electric cars as a purchase. And with this announcement, I believe, we’ll just see more and more investors running around to get their piece of the pie. So, I give Tesla the green light for purchase.
This is a scholarship you just do not want to miss.
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About the Author
Andrew Keene, editor of the 1450 Club, Super Options, en Project 303 at Money Map Press, is a world-renowned trader and a renowned expert on all things options.
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