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The Tesla stock split experiment


On August 11, 2020, at 16:59 EDT, Tesla announced a 5-for-1 stock split. The trading in the after-market and during the subsequent 2 days amounts to a unique financial economic experiment. Although stock splits have no fundamental impact on value, Tesla’s stock price rose 17.94% in the 2 days following the split—adding almost $50 billion in market value. This paper examines that price increases in detail and concludes there is no rational explanation for the size of the run-up following Tesla’s stock split announcement.

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Fig. 1


  1. 1.

    Shiller’s most famous paper in this regard is Shiller (1981).

  2. 2.

    Calculations are based on 186.36 million shares outstanding.

  3. 3.

    See Bennett et al. (2020) for a recent contribution and the associated bibliography.


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Correspondence to Bradford Cornell.

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I would like to thank Andrew Cornell, Shaun Cornell, Aswath Damodaran, Bala Dharan, Richard Gerger, Campbell Harvey and Jason Hsu for helpful comments.

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Cornell, B. The Tesla stock split experiment. J Asset Manag 21, 647–651 (2020).

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  • Stock split
  • Tesla
  • Market efficiency