Tesla made news on August 31, 2020, when it was announced they were splitting their stock 5-for-1. The company’s stock skyrocketed 3% immediately following the announcement to improve its valuation of more than $430 billion. Tesla has always been an interesting play for investors as its stock futures are seemingly unpredictable. Financial experts believe it’s only a matter of time before Tesla’s high valuation comes crashing down, but the company always defies the odds and finds a way to increase its stock prices. The recent 5-for-1 split may not mean much for portfolio management experts, but here are a few things you should be aware of.
What Tesla’s Stock Split Means For Investors
The CEO of Tesla, Elon Musk, has indicated for a long time that a short squeeze could be coming due to the number of people believing the company would fail. The stock split could result from that happening, and the surge in stock price is exactly what Musk expected. Investors who have stuck with Tesla through some of the ups and downs are enjoying the company’s current highs. In many ways, it’s hard to bet against Tesla because of the growing popularity of the industry and the established name brand, and the stock split should only benefit existing investors.
Concerns For Tesla Investors
Some investors are concerned about the stock split as it may indicate the stock rally in recent months has gone a little too far. Of course, the financial knowledge you have about anything during this time of the coronavirus pandemic is questionable since we live in unpredictable times and circumstances. It has even gotten to the point where some investors are hedging and betting on declines of Tesla stock. Current investors have some important decisions to make regarding their Tesla shares, but this is nothing new for the investors who have been with Tesla the longest.
What’s Next For Tesla?
It’s difficult for anyone to predict what the stock futures for Tesla will look like at any given time. The recent stock split should open the door for many new investors to jump on the Tesla bandwagon. At the same time, many current investors could see it as an opportunity to sell some of their shares and hedge their strategies a bit. The bottom line is that unless other companies bring immense competition to the electric vehicle industry, Tesla will be the major player for years to come. While the stock prices may go up and down frequently, Tesla will almost always be an attractive option for investors.
Stock Investing Info helps investors with their portfolio management to know the risks they are taking with every investment. Stock splits can open the door to new opportunities for both new and existing investors, and Tesla’s stock is always worth a close look. We want to help increase your financial knowledge so you can make the best decisions for your portfolio, so contact us today for tips and advice.