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Will Tesla's Stock Split Trigger Another 80% Run-Up?

TheMotleyFool

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Will Tesla's Stock Split Trigger Another 80% Run-Up?

On March 28, Tesla (NASDAQ: TSLA) made headlines when management announced at an annual shareholder meeting that it intends to seek shareholder approval for a stock split. While the split details weren't disclosed, when the stock last split in 2020, it split 5-for-1. With Tesla stock trading around $1,000 per share, a similar split would mean each share would be valued at around $200.

This mechanism works by cutting how much each share is was worth by a fifth and instantaneously paying a dividend of four additional shares, so stock owners are made whole. Tesla's last split triggered an epic 80% run-up in the stock price between the announcement and the actual split in August 2020.