The rise and rise of Tesla’s share price — up more than 376% this year alone, to above $2,049 — has been one of 2020’s market highlights, confounding the doubters and short-sellers, and vindicating a legion of quasi-religious Tesla bulls. Unsurprisingly, founder Elon Musk announced a 5-for-1 stock split, which comes into effect at the end of August. We asked committed Tesla fan and Vestact portfolio manager Byron Lotter whether this is just a bit of investment sleight-of-hand.

BL: I’ve watched stock splits with interest in the past and often when they’re announced the share does bump a little bit. Obviously, absolutely nothing changes with the company, but it does provide the stock with a little more liquidity, so there are people now who can own Tesla who couldn’t in the past. Maybe there’s a mental aspect to it: that you think you can grow more money fast if you own more shares, though if you do the maths it’s a complete fallacy. When the stock split was announced the share ...

BL Premium

This article is reserved for our subscribers.

A subscription helps you enjoy the best of our business content every day along with benefits such as articles from our international business news partners; ProfileData financial data; and digital access to the Sunday Times and Sunday Times Daily.

Already subscribed? Simply sign in below.



Questions or problems? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now