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$Tesla Motors(TSLA)$How Many Times Has Tesla Stock Split?

This will be the second time that Tesla splits its stock. Tesla previously did a 5-for-1 stock split on Aug. 31, 2020. Shares have risen over 100% since then.

Is Tesla's Stock Split Good For Investors?

In other words, do stock splits impact performance? This is probably the most important question for most investors and also the most difficult to answer.

There's some evidence that companies that split their stock outperform in aggregate in the short term, perhaps in part because splitting allows some stocks to be included in indexes like the Dow and increases their accessibility to retail investors. However, looking at individual stocks, there are many cases where a stock declines around the time of its split. Thus, I wouldn't recommend betting on short-term price appreciation in a single stock because of its split.

However, splits certainly aren't bad news. They usually only happen after a stock has increased in value a lot, as Tesla stock has done over the past few years. Winners tend to keep winning, so betting on companies that already have done well can be a successful strategy.

Also, companies usually won't split their stock unless they believe that their share price will keep increasing. One reason is that there are minimum share price requirements to be listed on the NYSE and Nasdaq exchanges. That said, even at the post-split price of ~$300, Tesla is a long way from falling to the current $1 per share requirement.

Relative to more important considerations like earnings growth and valuation multiples, stock splits are essentially a neutral event for long-term investors. But in a vacuum, it's clear that stock splits are more positive than negative.