More retail investors are expected to jump in now shares suddenly look relatively affordable
Elon Musk got nearly $4bn richer on Wednesday morning, probably before he even got out of bed. Why? Because on Tuesday evening Tesla (one-fifth owned by Musk) announced a “stock split” that in pre-market speculation early on Wednesday drove up the already stratospheric valuation of the company by another 7%.
Yet a stock-split is merely a housekeeping arrangement. It’s when a company divides the existing shares of its stock into multiple new shares, usually because the share price has reached such high levels that even buying one share looks too pricey for small investors.