Tesla plans 2nd stock split in less than 2 years

Shares of Tesla rose Monday after the electric car maker announced its second stock division in less than two years.

The company said in a regulatory filing, and also in a tweet, that it plans to make a request at an upcoming annual shareholders meeting to increase its number of authorized shares so that it can split the shares in the form of a dividend.

He did not say when a division or the proportion of this division of shares would occur, but would follow similar maneuvers by a trio of technology companies that have seen their shares increase in recent months.

Tesla stock prices rose $ 81.02, or 8%, to $ 1,092.37 in the afternoon. Shares have risen more than 60% in the last year. In January, the company released record results for 2021, including a net income of $ 5.5. billion. It was more than seven times its previous high for revenue of $ 721 million in 2020.

And the company is growing. CEO Elon Musk last week opened Tesla’s first European factory, a “Gigafactory” in Germany that will employ 12,000 people and produce 500,000 vehicles a year.

“Given the meteoric rise of the stock, it is not surprising that Musk & Co. is on the path to another stock division, especially with a robust demand for electric vehicles and the flagship factories of Berlin and Austin Giga are now on a planning path, “Dan said. Ives, who follows Tesla for Wedbush.

Ives, who expects Tesla shares to reach $ 1,400 over the next 12 months, said in a report that Tesla vehicle shipments are “far ahead” of Wall Street analysts’ projections. One obstacle for the company, as well as for other carmakers, that could moderate its financial performance is the continuing shortage of semiconductors as a result of global supply disruptions.

A division of shares would change the price per share, but not the overall value of those shares. It can raise the price of a company’s stock, at least temporarily, and the announcement was made on Monday.

Tesla said its board has given the green light to the proposal, but that the dividend is conditional on the board’s final approval.

Tesla had a 5 by 1 share split in August 2020, which went into effect a day after the company announced it planned to sell up to $ 5 billion of its shares. Just three months later, Tesla said it was planning another share sale, seeking to raise up to $ 5 billion in that offer.

Tesla is following other technology giants that have seen stock prices soar beyond the reach of most investors. Alphabet, the parent company of Google, announced a 20 to 1 split in February for Amazon.com Inc. he said this month that he would make a division of the same proportion.

“We see Tesla’s move following as Amazon, Google and Apple and launching its second stock division in two years as a smart strategic move that will be a positive catalyst for future stock,” Ives wrote in a research report.

In a presentation to the Stock and Securities Commission, Tesla said it would include more information, including the date and place of its annual shareholders’ meeting, in an upcoming power statement.

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