Tesla Stock Split (Should you Buy?)

Today Tesla (TSLA) announced they will do a 5 to 1 stock split, this means for each share you have, you will get 4 more. This will drop the price from $1,400 per share to around $290. 

Why Did Tesla Do This? 

Tesla announced Tuesday August 11, 

“Tesla, Inc. (“Tesla”) announced today that the Board of Directors has approved and declared a five-for-one split of Tesla’s common stock in the form of a stock dividend to make stock ownership more accessible to employees and investors. Each stockholder of record on August 21, 2020 will receive a dividend of four additional shares of common stock for each then-held share, to be distributed after close of trading on August 28, 2020. Trading will begin on a stock split-adjusted basis on August 31, 2020.”

This will drop the price and make it more affordable now new investors and employees. After the announcement Tesla stock (TSLA) jumped 8% then fell off 2%. 

My Thoughts 

I think that this is a overreaction in the market and there is a lot of FOMO in the market because people don't wanna miss another opportunity in the stock market.  

Also this doesn't change the value of the company. I think that if people wanna buy the stock, they should use dollar cost averaging to get the best share price.