Why Tesla's stock is so much cheaper now

[{"selector":"#anim-2b9de620-c704-4dd3-9475-cd9d54182b58","keyframes":{"opacity":[0,1]},"delay":0,"duration":3500,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-eb2c2158-4879-4084-a2bd-e51360d67ca3","keyframes":{"transform":["translate3d(-124.49999%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":3500,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] Tesla's stock price will drop Thursday, but not because of anything Elon Musk tweeted about electric vehicles, 'full self-driving' features, SpaceX updates, funny jokes, or his legal war with Twitter Images: Wikipedia

[{"selector":"#anim-a4c135e6-26da-4ce0-a259-be6d49d91519","keyframes":{"opacity":[0,1]},"delay":0,"duration":1600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-b4f03d56-3dc1-418d-a3a6-61308b66bb4a","keyframes":{"opacity":[0,1]},"delay":400,"duration":3500,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-1f68a5ba-cfe6-4a7c-b747-4090321af687 [data-leaf-element=\"true\"]","keyframes":{"transform":["translate(0%, 0%) scale(1.5)","translate(0%, 0%) scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] The electric car company did a 3-for-1 stock split Wednesday night after the market closed. So the price of one share is now a third of what it was a day ago

[{"selector":"#anim-15105b8f-ec99-47c1-b9f5-8cf36572e295","keyframes":{"opacity":[0,1]},"delay":0,"duration":1600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-9fa3b3da-0048-4d85-ba76-29a273594822","keyframes":{"opacity":[0,1]},"delay":400,"duration":3500,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-8c2166c0-bed6-4821-8f05-ea2f1fead5d1 [data-leaf-element=\"true\"]","keyframes":{"transform":["translate(2.1267563709254667%, 0%) scale(1.5)","translate(0%, 0%) scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] Wednesday's trading of Tesla (TSLA) stock ended at approximately $891, which indicates that Thursday's trading was just below $300

[{"selector":"#anim-a59b841a-8419-46d1-9c2f-c210dfc0cf17","keyframes":{"opacity":[0,1]},"delay":0,"duration":1600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-ef16d0a1-84bc-4074-9ff4-391393610528","keyframes":{"opacity":[0,1]},"delay":400,"duration":3500,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-18b16508-d3f9-429a-8505-cf386ac99816 [data-leaf-element=\"true\"]","keyframes":{"transform":["translate(14.249999940552946%, 0%) scale(1.5)","translate(0%, 0%) scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] Tesla's second separation in two years was approved in June. Before you celebrate that a Tesla share is "cheaper," remember that Tesla's valuation hasn't changed

[{"selector":"#anim-18d5c860-9e56-4841-901b-c5499798ced7","keyframes":{"opacity":[0,1]},"delay":0,"duration":1600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-39d31e02-d7e0-45a3-8ccb-395720c14fdc","keyframes":{"opacity":[0,1]},"delay":400,"duration":3500,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-bcbd6b93-0d6f-4ba4-82d6-f97979b7049b [data-leaf-element=\"true\"]","keyframes":{"transform":["translate(0%, 0%) scale(1.5)","translate(0%, 0%) scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] Even after the split, the company is still worth more than $930 billion. Shares still trade at a high multiple of more than 70 times what analysts think the company will make in 2022

[{"selector":"#anim-4c7b2a4d-f53c-44f7-bbbf-3392eccbff97","keyframes":{"opacity":[0,1]},"delay":0,"duration":1600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-461a490d-d173-43f5-8d9c-5ce9c22efb82","keyframes":{"opacity":[0,1]},"delay":400,"duration":3500,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-dbb620c0-5fac-4368-96ae-212b9538aa1a [data-leaf-element=\"true\"]","keyframes":{"transform":["translate(-24.983109037065574%, 0%) scale(1.5)","translate(0%, 0%) scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] A huge premium compared to the market values of established automakers including Ford (F), General Motors (GM), Volkswagen (VLKAF), and Toyota (TM)

[{"selector":"#anim-f3299f6a-6f4e-4c39-80b7-c54b4ed3d2f3","keyframes":{"opacity":[0,1]},"delay":0,"duration":1600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-a9565ffc-e014-46ab-8a98-6cb18c67beb5","keyframes":{"opacity":[0,1]},"delay":400,"duration":3500,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-832f9d56-f16f-4d18-a886-e445beac584d [data-leaf-element=\"true\"]","keyframes":{"transform":["translate(0%, 0%) scale(1.5)","translate(0%, 0%) scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] [{"selector":"#anim-513a37e0-a8a0-4931-a398-40cd01446556","keyframes":{"opacity":[0,1]},"delay":0,"duration":3500,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-469eccf1-9f17-4d6f-ad21-2627025741fb","keyframes":{"transform":["translate3d(-124.49999%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":3500,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] Investors worry about increased competition in the EV industry from traditional automakers and Musk's many distractions. (SpaceX. Company Boring. Twitter's takeover drama. (And more.) Images: Britannica

[{"selector":"#anim-23939577-b1ac-4b85-b2ae-3099a01d6498","keyframes":{"opacity":[0,1]},"delay":0,"duration":1600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-f170390d-7951-4e14-a59f-1b3a56de2f77","keyframes":{"opacity":[0,1]},"delay":400,"duration":3500,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-4bca8aa7-f853-492c-9b65-20c1133ebfa4 [data-leaf-element=\"true\"]","keyframes":{"transform":["translate(0%, 0%) scale(1.5)","translate(0%, 0%) scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] The only thing that changed after the stock split was that investors now own three times as many Tesla shares at one-third of the price they were at on Wednesday

[{"selector":"#anim-0ed866bc-98ff-4480-9b0e-86c23bae80b8","keyframes":{"opacity":[0,1]},"delay":0,"duration":1600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-eaa0c9cc-2f41-43e9-b867-80e2e9afe037","keyframes":{"opacity":[0,1]},"delay":400,"duration":3500,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-b50864f4-ae8b-497c-b2c9-87c31b1861c6","keyframes":{"opacity":[0,1]},"delay":0,"duration":3500,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-ce557d95-1233-47e9-a0c6-0dbb5731f29a","keyframes":{"transform":["translate3d(-124.49999%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":3500,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-b2251a76-5651-4cfe-b455-60ce04823bdd [data-leaf-element=\"true\"]","keyframes":{"transform":["translate(2.123461251092465%, 0%) scale(1.5)","translate(0%, 0%) scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] Forbes says that Musk has a net worth of about $264 billion, making him the richest person in the world. About 15% of Tesla's common stock is still owned by Musk Images: Gettyimages

[{"selector":"#anim-ee2d9ba9-11d7-42a6-89c7-5d3da434390c","keyframes":{"opacity":[0,1]},"delay":0,"duration":1600,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-8cf1d82e-2a59-4939-82b0-08061b135c69","keyframes":{"opacity":[0,1]},"delay":400,"duration":3500,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-aa5f97fd-71e5-4762-bc87-ed05af12294d [data-leaf-element=\"true\"]","keyframes":{"transform":["translate(0%, 0%) scale(1.5)","translate(0%, 0%) scale(1)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] High-priced companies often split their shares to make them more cheap. Some investors may buy a stock at a lower price