Tesla said in a regulatory filing that it plans to make a request to increase the number of its authorized shares at the upcoming annual shareholder meeting.
Tesla is following in the footsteps of other tech giants whose shares are beyond the reach of most investors [File: David Zalubowski/AP Photo]
Posted March 28, 2022 March 28, 2022
Tesla shares rose sharply on Monday after electric car makers announced a second stock split in less than two years.
The company said in a regulatory filing and a tweet that it plans to make a request at the upcoming annual general meeting to increase the number of its authorized shares in order to split the shares in the form of dividends.
The stock price rose more than 5% at the opening.
Tesla's stock price has soared in recent months, rising more than 60 percent in the past year. Now, the price of a stock is more than $1,000.
And the company is growing. It opened its first European plant in Germany last week, a "gigafactory" that will employ 12,000 people and produce 500,000 cars a year.
"Given the rapid growth of the stock, it is no surprise that Musk & Co is on the path of another stock split, especially with strong demand for electric vehicles and the expansion of giga flagship plants in Berlin and Austin declining," said Dan Ives, who followed Tesla into Wadebush.
Tesla said its board of directors had approved the proposal, but the dividend would depend on the board's final approval.
Tesla conducted a 5-to-1 stock split in September 2020 that took effect a day after the company announced plans to sell up to $5 billion worth of shares. Just three months later, Tesla said it was planning to sell its shares again, hoping to raise up to $5 billion through the offering.
Tesla is following in the footsteps of other tech giants whose stock prices are already beyond the reach of most investors.
Ives wrote in a research note: "We believe that Tesla's second stock split in two years after Amazon, Google, Apple and other companies is a wise strategic move that will be a positive catalyst to move the stock price forward." ”
In filing with the SEC, Tesla said it would include more information in its upcoming proxy statement, including the date and location of the annual shareholders' meeting.