After Tesla’s shareholders approved a 3-1 stock split earlier this month, the electric vehicle maker now announced that its shares would begin trading on a split-adjusted basis on August 25.
According to the company’s 8-K filing, every investor holding Tesla stock on August 17 will receive two additional shares for every share it holds. These shares are to be distributed after the close of trading on August 24.
Tesla’s stock split follows similar moves made by high-profile companies like Amazon, Apple, and Google’s parent firm Alphabet. The idea behind the split is to make the shares more affordable to investors and to ramp up the interest in the stock.
The shares of Tesla have been performing quite well recently, jumping 20% in the last month. However, the confirmation of the stock split has surprisingly sent the stock down more than 7%. The company’s shares closed at a flat $850.00 per share on Tuesday.
There seem to be less enthusiasm about this stock split than the one Tesla pulled off two years ago. Back then, the company initiated a 5-1 stock split after reaching the $1,300 per share mark. This kicked off a surge that amounted to a 60% increase and north of $2,000 per share by the time the stock split became effective.