Tesla’s Stock Split Sends A Message To Both Retail Shareholders And Short-Sellers

Tesla’s Stock Split Sends A Message To Both Retail Shareholders And Short-Sellers

Tesla CEO Elon Musk speaks during the unveiling of the new Tesla Model Y in Hawthorne, California on ... [+] March 14, 2019. (Photo by Frederic J. BROWN / AFP) (Photo credit should read FREDERIC J. BROWN/AFP via Getty Images)



AFP via Getty Images

Tesla's (NASDAQ: TSLA) announcement of a five-for-one stock split is being received enthusiastically by the stock market. Soon after the announcement, the stock price increased by about 7% in the after-market trading on Tuesday. Such a positive response to the news is puzzling since the split will merely break the firm's each share into five smaller pieces without affecting any fundamental aspects of its business or finances. In an ideal world, a shareholder who has one share worth $1400 before the split