Here's Why Tesla and Apple's Stock Splits Don't Matter
If you pay attention to any financial news at all, you've probably seen all the discussion lately about both Apple (NASDAQ: AAPL) and Tesla (NASDAQ: TSLA) planning stock splits in the near future. Apple is splitting its stock 4-for-1, while Tesla is doing a 5-for-1 split.
When a stock splits, investors get multiple shares for each share they own, and the share price is reduced because more shares are now outstanding. In the case of Apple's split, you'll get three additional shares for each of your current ones, while in Tesla's case you'll get four extra shares. The split doesn't change the value of your holdings, though, nor does it change the market capitalization (the total market value of all shares outstanding).
For companies, however, there are a few reasons to do stock splits -- but one of the biggest and most important reasons really shouldn't matter anymore. Here's why.
Source Fool.com
