The five-for-one Tesla’s stock information that was announced, received with much enthusiasm in the stock market. It increased the price of stocks with a rate of 7% after the announcement.
This is not the first time that the investors or shareholders have responded positively to the changes. This has happened before with other business entities too. Several academic studies that have highlighted such instances in the past .
For retail investors, it is undoubtedly good news. Why is it so? A retail investor will be able to buy a stock of value $200 as compared to a stock that has a value of $1500. Also, many retail traders operate within a range when it comes to trading. So, a stock split means the range is within their reach.
Having pondered over all the probable reasons for the Tesla’s stock information, one aspect that experts say that splitting stock value will invariably improve the retail base. As compared to other companies, retail shareholders have quite a good stake in Tesla. Also, since the company has faced pressure related to short selling for several years now, this move might be beneficial. Another reason is that it becomes easier for the company to focus more on projects that are planned for the long-term and do away with the everyday pressures of the company.
