Tesla’s stock price dropped today on the markets. This has caused some holders to panic, unsure why the stock is getting cheaper.
Elon Musk has publicly said that Tesla Factories are “losing an insane amount of money,” which is likely causing the stock price drop. But what exactly has caused Tesla stock to become cheaper today? Let’s look into some reasons.
Why did Tesla’s Stock get Cheaper today?
Tesla’s 3:1 stock split that was announced in early August takes effect starting today, making the shares accessible to a larger group. This is the likely cause behind their stock getting cheaper today.
Therefore, one share yesterday now costs one-third of what it once did. The stock split will make the shares more affordable and accessible to a wider group of enthusiasts trying to get a piece of the Tesla pie. The decision to split the stocks will also make its stock options trading cheaper.
According to Tesla’s proxy statement, the main reason for wanting to divide its common shares is to attract and keep top talent. The business claims that, in contrast to other manufacturers, it offers every employee the chance to acquire equity.
The company is still worth more than $930 billion after the split. However, the stock has steadily decreased over the course of 2022, with the most recent drops being the largest.