The stock will begin trading on an allocation-adjusted basis on August 25.
Stock splits are usually done to increase a stock’s liquidity, which makes it easier for investors to buy and sell the stock. Essentially, the move will triple the number of Tesla shares on the market, but the company’s overall valuation — and the value of each investor’s stake — won’t change. Splits can also stimulate demand for a stock because they put the price within reach of small, individual investors.
While deep-pocketed institutional investors may not care as much about the company’s overall stock price, individual investors may be put off by high-priced stocks. The growth of no-fee trading apps, including Robinhood, E-Trade and others, has made stock splits much more prominent in recent years.