3/15/2023 0 Comments Linkedin stock split history“This could further fuel the bubble in Tesla’s stock that has been brewing over the past two years,” he says. While the Tesla stock split announcement didn’t come from Musk’s personal account, the market thinks it’s got his fingerprints all over it – for good or for ill.īut David Trainer, CEO of stock research firm New Constructs, accused the company of trying to make a stock whose “valuation is completely disconnected from fundamentals … even more attractive to unsuspecting retail investors”. Heck, he even used Twitter to infamously suggest he was about to take Tesla private in a deal that never happened – and landed him in just a little hot water. He’ll lash out at the Securities and Exchange Commission. He’ll hint at Tesla and SpaceX development plans. Musk is a frequent tweeter and loves using the social media platform to lead his 79.4 million followers on a merry dance. But it should be noted academic research suggests the sugar hit from a stock-split announcement tends to be relatively short-lived, and many brokers already allow fractional ownership of stocks, meaning retail investors daunted by the high price of Tesla shares could already find a way to play the stock without outlaying four figures ![]() Tesla’s jump on Monday night says there are many investors who believe the mind trick will work. The idea is that Joan Bloggs suddenly feels like she has a chance to own a slice of the action at this lower price, she buys a few shares and, all of a sudden, the stock is rising. A 20-for-1 stock split at Tesla (as per Amazon and Alphabet’s recent proposals) would make each Tesla share worth $US54.59. When the price of a single share in a company gets very high – one Tesla share costs $US1091.84 at present, having risen a staggering 42 per cent within just two weeks – it can start to look out of the reach of retail investors. Tesla shares surged 8 per cent on Monday night – adding $US84 billion, or more than the market capitalisation of General Motors – after the company tweeted its intention to pursue a stock split, following similar announcements in recent months from fellow tech giants Alphabet (parent company of Google) and Amazon.Ī stock split is essentially a mind trick, given it changes absolutely nothing about the underlying value of the company. And it’s through this prism that we should see Monday night’s announcement (via Musk’s favourite medium of Twitter, of course) that Tesla will ask its shareholders to vote to allow it to undertake its second stock split in two years.Įlon Musk is seen as a master of investor psychology. ![]() As the founder of one of the most richly valued manufacturing companies in history, with a personal wealth of some $US270 billion ($359 billion), you’d think Tesla talisman Elon Musk had better things to worry about than engineering relatively meaningless, sharemarket sugar hits.īut while Musk is many things – genius, visionary and occasional ratbag – he’s also shown himself to be an expert in market psychology.
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