Tesla implemented the split by paying a stock dividend of two shares for each share held after the close of trading. The stock split makes the shares less expensive, and more accessible for a wider base of retail investors. It also makes trading options in the stock less expensive.
When Tesla first proposed the stock split, it said the move was primarily intended to help the company “offer every employee the option of receiving equity” in Tesla, and that increasing employee satisfaction would help to maximize stockholder value.
The first time Tesla split its stock in August 2020, shares had gained 81% between the split announcement and the day the stock split. In the month following the split, Tesla shares dropped about 14%, but recovered in less than two months, and were up about 36% six months after the split.
"Shares of Tesla are up 28% since it announced its most recent split, but still down 16% for the year as investors have realized that it is not immune from a slowdown in spending, especially discretionary spending," said Caleb Silver, Editor-in-Chief of Investopedia.