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Stock Splits, Explained.
Well, it looks like Tesla is looking to split its stock again.
If shareholders approve this stock split, it would mark the second stock split for Tesla in 2 years.
With other companies, such as Google, also splitting its stock, what exactly is a stock split and why do companies split its stock?
What is a Stock Split?
The most important thing to remember is that a stock split does not change the valuation of the underlying company or its stock.
A stock split will increase the number of shares outstanding, but the price of each share is adjusted so that the market cap of the company stays the same.
As seen in the graphic above, nothing really changes outside of the number of shares outstanding.
For example, in a 2-for-1 split, every share you own will turn into 2 shares, but the price of each share will be…
