“Perhaps this is Elon’s way of increasing retail ownership and reducing institutional ownership?”Įmployee ownership and retaining human capital are more reasons.

“The split can make the stock look more attractive, luring new buyers into the stock to help keep the recent momentum,” said Lindsey Bell, chief markets and money strategist at Ally Invest Securities.

There may be other reasons for a company like Tesla to consider increasing its outstanding shares. “Retail investors perceive price differently - and the stock is now attainable at a lower price.” “It is just a sentiment effect,” said Gina Martin Adams, chief equity strategist at Bloomberg Intelligence. Amazon’s announcement attracted “significant” retail interest and was likely the biggest factor in the stock’s outperformance during a week when the Nasdaq 100 fell almost 4%, according to Vanda Research. Tesla was by far the most-purchased stock among Fidelity customers on March 28, according to data from the brokerage firm. Yet splits are causing day traders to pile in, fueling rallies in these companies’ shares. A split doesn’t affect a company’s business fundamentals, and investors averse to a stock’s high price tag can simply buy fractional shares instead.

Spotify stock split date