Tesla pursues its 2nd stock split in less than two years: Tesla stock soared on Monday after the electric vehicle manufacturer announced its second stock split in less than two years.
In a regulatory filing and a tweet, the company stated that it intends to request an increase in the number of authorized shares at its upcoming annual shareholders meeting so that it can split the stock in the form of a dividend.
At the opening bell, stocks were up more than 5%.
Tesla‘s stock has risen dramatically in recent months, with a year-to-date gain of more than 60%. A single share is now worth over $1,000.
And the business is expanding. Its first European factory, a “Gigafactory” in Germany, opened last week, employing 12,000 people and producing 500,000 vehicles per year.
“With robust EV demand and the build-outs of the flagship Berlin and Austin Giga factories now on a glide path, it’s not surprising that Musk & Co. are heading down the path of another stock split,” said Dan Ives, who follows Tesla for Wedbush.
The proposal has been approved by Tesla Inc.’s board of directors, but the dividend is subject to final board approval.
In September 2020, Tesla had a 5-for-1 stock split, which took effect one day after the company announced plans to sell up to $5 billion in stock. Three months later, Tesla announced that it was planning another stock offering, with a goal of raising $5 billion.
Tesla is following in the footsteps of other tech behemoths, whose stock prices have soared beyond the reach of most investors.
“We view Tesla’s decision to follow Amazon, Google, and Apple by initiating its second stock split in two years as a smart strategic move that will be a positive catalyst for shares going forward,” Ives wrote in a research report.
Tesla said in a filing with the Securities and Exchange Commission that it would include more information in an upcoming proxy statement, including the date and location of its annual shareholder meeting.
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