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Is Tesla Inc. (TSLA) Splitting in the Near Future?
We recently published a list of 12 Stocks That Could Split in the Near Future. In this article, we are going to take a look at where Tesla Inc. (NASDAQ:TSLA) stands against other stocks that could split in the near future.
Stock splits don’t change how much a company is worth, but they make each share cheaper and easier for people to buy, considering it’s a forward split. Stock splits can vary from a simple 2-for-1 split to a larger 100-for-1 split or more. In a 2-for-1 split, each share is turned into two new shares. This makes each share half the price, but the total value of the company remains the same. For example, if a share costs $100, after a 2-for-1 split, you’ll have two shares that cost $50 each. This can make it easier to buy shares and attract more people to invest. Even though the share price goes down, the total amount of money paid out to shareholders stays the same. Hence, splitting shares doesn’t change how much control existing shareholders have in the company. The main goal is to make the company’s stock more appealing to investors. There’s no proof that stock splits make a company better, but they can make investors feel more positive about the company. But with these benefits come the costs and risks. The process requires legal work and can be expensive.
Splitting a stock doesn’t change a good company into a bad one or vice versa. The price might go up a bit after the split, but it won’t change the company’s long-term fundamentals. Sometimes, a low stock price can actually look bad for a big company. Still, many companies practice splitting stocks if their share prices are growing too high.
On January 16, Mark Newton, Fundstrat Global head of technical strategy, joined ‘Squawk Box’ on CNBC to discuss that the long-term market trends look positive. The market initially experienced a cooler-than-expected jump, but concerns were raised about the breadth of the market and the potential impact of interest rates on small-cap stocks. Mark Newton expressed a constructive view but noted that the market’s breadth had deteriorated significantly, with only about 25% of stocks currently above their 50-day moving average. This decline was particularly evident in sectors like healthcare, where seven sectors lost more than 4% in the last month.
Despite these challenges, Newton highlighted that technology stocks had rebounded, helping to keep indices afloat and maintaining long-term trends. However, he noted that near-term sentiment had become pessimistic regarding the potential policies of the president-elect, which added to market uncertainty. He maintained his target for the S&P 500 at 6650, suggesting that interest rates might begin to roll over in the coming months, which could be bullish for equities given their recent correlation with treasury yields.
As Tesla Inc. (TSLA) continues to soar in the stock market, many investors are wondering if a stock split is on the horizon. With shares of the electric vehicle company reaching astronomical prices, some believe that a split could make the stock more accessible to a wider range of investors.
Tesla’s stock has skyrocketed over the past year, reaching over $800 per share at one point. This has led to speculation that the company may consider a stock split to bring the price down to a more manageable level for retail investors.
However, Tesla CEO Elon Musk has been known to be hesitant about splitting the stock in the past. In a tweet from 2019, Musk stated, “I don’t think it’s a good idea to split the stock. It just makes it more trading noise, which is distracting.”
Despite Musk’s reluctance, the possibility of a stock split remains a topic of discussion among investors. With Tesla’s market cap continuing to grow, some believe that a split could be beneficial for the company in the long run.
Only time will tell if Tesla will ultimately decide to split its stock. In the meantime, investors will continue to keep a close eye on the company’s movements and announcements for any hints of a potential split in the future.
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