Each Tesla shareholder will receive four additional shares, which when added to their existing share will equal the pre-split share price. The price of all five shares will be equal to the closing price on 28 August.
The split itself (an increase in the number of shares in circulation by splitting their initial number) will not change Tesla's market capitalization, but it may attract smaller investors who previously could not afford to purchase the company's expensive securities.
The stock split is now "a smart strategic move at the right time," said Wedbush analyst Dan Ives, as Tesla shares have more than tripled this year.
The split in late August could serve as the final impetus for Tesla's already high stock price. Stock growthamounted to approximately 283% YTD, with investor interest growing due to profit figures, potential inclusion in the S&P 500 and significant vehicle shipments amid the coronavirus pandemic. Tesla's current market capitalization makes it one of the most valuable carmakers in the world, despite producing far fewer vehicles than established brands like VW or Toyota.