Tesla’s stock price fell in the markets today. This has caused some holders to panic as they don’t know why the stock is getting cheaper.
Elon Musk has publicly said that Tesla factories are losing “an insane amount of money,” which is likely what is causing the price drop. But what exactly has made Tesla stock cheaper today? Let’s look at some reasons.
Why has Tesla’s stock gotten cheaper today?
Tesla’s 3:1 stock split announced in early August takes effect from today, making the shares accessible to a larger group. This is the likely cause of their stocks getting cheaper today.
That’s why a stock yesterday now costs a third of what it once did. The stock split will make the stock more affordable and accessible to a wider group of enthusiasts trying to get a slice of the Tesla pie. The decision to split the stock will also make stock option trading cheaper.
According to Tesla’s proxy statement, the main reason for wanting to divide its common stock is to attract and retain top talent. The company claims that unlike other manufacturers, it offers every employee the opportunity to acquire shares.
The company is still worth more than $930 billion after the split. However, the stock has steadily declined over the course of 2022, with the most recent declines being the largest.