What's going on?

Investors will soon be getting a lot more Musk for their buck: Tesla announced a �five-for-one� stock split late on Tuesday, and its existing shares rose 7% on Wednesday.

What does this mean?

Every share a Tesla investor owns � currently worth around $1,500 apiece � will be replaced with five shares, each worth about $300 (all else equal). That might help woo investors who�ve been put off by the price of a single share, which has more than tripled so far this year. Then again, that hasn�t exactly put off many people so far: last month, nearly 40,000 traders who use Robinhood�s investing app bought Tesla shares in one four-hour window (tweet this).


Existing shareholders like them don�t need to do anything: their holdings will be updated at the end of the month. And since the electric carmaker will also update its per-share metrics, investors should easily be able to compare its past profits to future earnings.

Why should I care?

For markets: Anything Apple can do…

Apple announced a �four-for-one� stock split last month, perhaps in part because it was hoping its share price would jump if investors could buy in more easily. Since then � and even before the split�s happened � Apple�s stock has risen so far it�s reclaimed its moniker as the world�s most valuable public company. Tesla � already the world�s most valuable car company � might be looking for a similar effect by winning over investors who bought its upstart rivals� cheaper shares instead.

For you personally: Investors love a good meeting.

Some online stock brokerages already let you buy fractional shares and get in on any dividends the company pays. But a fractional share doesn�t give you other rights that come with holding complete shares, like attending annual meetings and voting on company policies. That can be a dealbreaker for �institutional� investors � which is partly why lowering the price of a whole share is such a big deal.