By
Svetlana Soroka
April 18th, 2024
Tesla approved the 3-in-1 stock split in June, which does not affect the company’s valuation. The EV giant is still worth over $930 billion after the split.
Shares of EV giant Tesla Inc (NASDAQ: TSLA) closed down 2% on Thursday, following its 3-in-1 stock split after the closing bell on the previous day. The Tesla 3-in-1 stock split means that a share now costs a third of its value a day before. For each Tesla share owned as of 17th August, the 3-in-1 stock split allowed investors to receive two additional shares. While the stock closed at $891.29 before the split, it opened at $302 and closed at $296.07 on Thursday. At writing, Tesla is trading down 0.12% to $295.70 in the after-hours session.
Tesla Initiates 3-in-1 Stock Split
In August 2020, Tesla decided to split its stock on a five-for-one basis, after which it crossed the $1 trillion market valuation in 2021. The Tesla 3-in-1 stock split is the second split by the company in years. Chief market strategist at B. Riley, Art Hogan, retail investors are the top beneficiaries of stock splits. He said splits give retailers more affordable options. He added that retail investors are integral to Tesla and the 3-in-1 stock splits acknowledge it. Senior index analyst for S&P and Dow Jones Indices Howard Silverblatt, noted that Tesla is the sixth company in the S&P 500 index to split its shares since the year started.
Tesla approved the 3-in-1 stock split in June, which does not affect the company’s valuation. The EV giant is still worth over $930 billion after the split. However, the carmaker is still down over 15% this year amid increased competition in the EV market.
Generally, many companies are slotting their stocks to meet the increasing need to diversify the investor base. E-commerce company Amazon.com Inc (NASDAQ: AMZN) and multinational technology company Alphabet (NASDAQ: GOOGL) are also known for splitting their stocks. Alphabet split its two classes of shares by a 20-in-1 margin in July, reducing the price of each share from over $2,200 to about $110. The company’s capitalization remained the same at almost $1.5 trillion while retail investors gained more access to the shares.
Tesla Hits 3 Million Cars
Tesla recently announced a new milestone of manufacturing over 3 million cars. The company’s CEO Elon Musk revealed the achievement in a tweet also congratulating Gigafactory Shanghai on making its millionth car. The EV maker gradually reached this remarkable stage after being able to produce not more than 3,000 vehicles a decade ago. The Fremont factor made its 2 millionth car in July this year, meaning that Tesla manufactured another million within a month. A milestone indeed!
TSLA has shed 0.36% over the past month and lost 0.20% in the last five days. Wedbush analyst Dan Ives stated that Tesla has rising supply challenges. The analyst wrote:
“Green tidal wave set to play out with Tesla front and center. While the shaky macro will clearly trim some demand for Tesla (as well as the industry) we believe demand continues to hold up firm for the EV stalwart across the US, Europe, and China.”
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