Tesla seeks second stock split in less than two years, shares jump
At opening bell, shares jumped more than 5 percent
LINCOLN, Neb. (KLKN) – Tesla shares rose sharply Monday after the company announced its second stock split in less than two years.
The company said that it plans to make a request at its upcoming annual shareholder’s meeting to increase its number of authorized shares. This would enable Tesla to split its stock in the form of a dividend.
Tesla’s shares have rocketed higher in recent months and are up more than 60% over the past year. At opening Monday morning, shares jumped more than 5 percent. A single share now costs more than $1,000.
The company opened its first European factory last week, a “Gigafactory ” in Germany that will employ 12,000 people and produce 500,000 vehicles a year.
“Given the stock’s meteoric run it’s not a surprise that Musk & Co. are heading down the path of another stock split, especially with robust EV demand and the build-outs of the flagship Berlin and Austin Giga factories now on a glide path, said Dan Ives, who follows Tesla for Wedbush.
Tesla Inc. said that its board has approved the proposal, but that the dividend is contingent on final board approval.
In September 2020, Tesla had a 5-for-1 stock split which went into effect one day after the company announced that it planned to sell up to $5 billion worth of its stock. Just three months later, Tesla said it was planning another stock sale, looking to raise up to $5 billion in that offering.
Tesla follows other tech giants that have seen the price of shares vault out of reach of most investors.
“We view Tesla’s move following the likes of Amazon, Google, Apple and 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.
In a filing with the Securities and Exchange Commission, Tesla said it would include more information, including the date and place of its annual shareholder meeting, in an upcoming proxy statement.
