The latest update about the Tesla shares is nothing less than a huge shocker for the entire shareholder community. The update is surrounding the decrease in the share prices of Tesla in the future.
There are rumors that the share prices of Tesla are about to become less expensive at a significant rate. The rumors suggest that the share prices of the electric vehicle giant may dip almost 3 times compared to their current trading price.
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On Friday, the officials at Tesla made an announcement in regards to the 3-for-1 stock split. The officials revealed that the decision for the stock split was approved by the board members at the electric vehicle giant.
Once implemented, it will be the first split Tesla will have put in place since August of 2020. Following the board’s approval, it will be the shareholders who will be required to give the final approval for the stock split.
The officials confirmed that it will be during the annual shareholder meeting in August where they will be proposing the same strategy to the shareholders. If they also approve the proposal, then the stock split will be carried out.
An Advice for the Investors
At present, the share price for Tesla is currently worth $696 per share. For the sake of better understanding, if Tesla’s stocks undergo a 1-to-3 stock split, its share price would be $232 per share.
The officials also shared advice for the entire investment community. They asked all the investors not to worry about the stock split. While many investors are afraid that they will end up facing a dip, Tesla officials have shared a statement for the investors not to worry at all.
The officials clarified that with the split, each investor will have their stocks multiplied but the overall value of the stocks would remain the same. The overall value of the stocks the investors held will not be impacted by the split. Instead, they will have more shares so the growth in the share prices would be more profitable.
The reason behind the Split
The reason behind the split is to make Tesla stocks affordable for individual and smaller investors. This way, Tesla aims to increase its liquidity and more investors will soon be joining the Tesla stock market. This would be a very promising move made by Tesla for the existing and potential investors.
The value of a stock has never been a concern for deep-pocketed institutional investors. However, at such a price tag, the Tesla stock is definitely out of the reach of individual investors. Once the split takes place, the investors will be able to benefit from it.
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