Tesla (TSLA) announced today that it is planning a new stock split, and it is going to put it to a shareholder vote later this year.
Back in 2020, Tesla announced a five for one stock split.
At the time, Tesla’s stock was trading at around $1,300 a share, but the stock split announcement sent its stock price surging to a record high of $2,000 a share.
The split resulted in the price per share being reset at around $460 billion or $430 billion market capitalization.
There have been ups and downs since, but Tesla’s stock is now up 63% over the last 12 months, and it is now trading at over $1,000 a share again and at over $1 trillion in market cap.
Today, the automaker announced another stock split – pending shareholder approval.
Tesla wrote in a new SEC filing today:
On March 28, 2022, Tesla, Inc. (the “Company” or “Tesla”) announced its plan to request stockholder approval at the upcoming 2022 Annual Meeting of Stockholders (the “Annual Meeting”) for an increase in the number of authorized shares of common stock through an amendment to the Company’s Amended and Restated Certificate of Incorporation (the “Amendment”) in order to enable a stock split of the Company’s common stock in the form of a stock dividend. Tesla’s Board of Directors (“Board”) has approved the management proposal, but the stock dividend will be contingent on final Board approval.
The filing didn’t include details about the proposed split, but more should be released with materials for the shareholder’s meeting, which is generally held in June.
Tesla also tweeted about the planned stock split:
The announcement today sent Tesla’s stock price up 5% in pre-market trading – or about $1,060 a share.
Traditionally, companies have announced stock splits to make their price per share more reasonable after their stock price has risen considerably. It makes the stock more accessible to smaller individual investors.
However, the practice has become less useful in recent years as most individual investors have moved to apps like Robinhood (US) and WealthSimple (Canada), which allow the purchase of fractional shares on big stocks like Tesla’s.
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Author: Fred Lambert
Source: Electrek
