Tesla stock split: what you need to know

Tesla five-for-one stock split 2020

The Tesla (TSLA) stock split on 31 August 2020 was a five-for-one split, meaning that there are now five times the number of shares in circulation as there were pre-split, and historical share prices have been adjusted to one fifth of their pre-split value.

Why did Tesla split its stock?

Tesla released a statement that the split was to ‘make stock ownership more accessible to employees and investors’.¹ This came after a meteoric year for the company, which added more than 500% to its share price over 12 months from August 2019 to August 2020.

Tesla stock split history

This is the first stock split that Tesla has ever carried out, so there is no company precedent to compare this split to. What we do know, is that many investors and traders had been eyeing a Tesla stock split for some time given the share’s price rise in the first half (H1) of 2020 – which occurred despite the coronavirus pandemic.

Tesla stock split example

The Tesla stock split was five-for-one. This meant that there was a five-fold increase in the number of shares in circulation and that each share was reduced to one-fifth of its pre-split value. For example, an investor that owned 10 shares worth $2318.49 each pre-split would’ve had 50 shares worth $463.69 each post-split (based on the company’s 52-week high pre-split).

Tesla’s split-adjusted share price

The split-adjusted share price is simply whatever the price was before the split, divided by five. For example, if TSLA stock was trading at $1500 a share pre-split, the split-adjusted share price would be $300. If it was trading at $400 a share pre-split, the split-adjusted share price would be $80.

How to trade or invest in Tesla shares

Trading and investing are two different ways to take a position on the Tesla share price. Investing means you’ll take direct ownership of TSLA stock and become a company shareholder; trading means you’ll be speculating on the share price rising or falling without owning the stock outright.

Learn more about trading and investing in Tesla shares

When you invest in TSLA with us, you’ll benefit from our best commission on US-listed shares.² This means you’ll be able to buy Tesla shares for zero commission if you opened three or more positions on your share dealing account in the previous month.

Create a share dealing account to invest in Tesla

Alternatively, you can trade the TSLA share price with financial derivatives like spread bets and CFDs. These let you take a position without owning the stock outright, and you’ll be able to trade with leverage – granting you full market exposure for an initial deposit known as margin.

With spread bets and CFDs, you can go long to speculate on the Tesla share price rising, as well as short to speculate on it falling. This means that you can profit from upwards movements in the TSLA share price, as well as downwards movements.

Create a trading account to speculate on Tesla

Will Tesla stock split again?

At this stage and because this is Tesla’s first stock split, it’s hard to know whether the company will split its stock again. What we do know, is that other large companies such as Apple (AAPL) and Alphabet (GOOGL) have carried out more than one stock split in their history, so perhaps Tesla will be no different in this respect.

Learn about the upcoming Apple stock split

Footnotes

1 Financial Times, 2020.
2 Place 3+ trades on your share dealing account in the previous month to qualify for our best commission rates.