Tesla has announced plans for a second stock split in the span of a little less than two years, giving a slight bump in prices to shares that had been trading lower following reports of Tesla’s COVID-19 woes — reports Yahoo Finance.
In a tweet published early Monday morning, the company said it will “ask shareholders to vote” on another stock split at this year’s annual meeting.
Tesla will ask shareholders to vote at this year’s annual meeting to authorize additional shares in order to enable a stock split.
— Tesla (@Tesla) March 28, 2022
In a regulatory filing that followed the tweet, Tesla said increasing the number of its common shares will allow for a split by way of a dividend. The company did not offer specifics on the ratio of the split and said that will be worked out later.
According to the filing, Tesla’s board has accepted the management proposal for the split, but the authorization of the dividend that will allow for it still requires final approval. The company said it will release a more comprehensive proxy statement at a later time with details including the date and location of this year’s annual meeting.
Tesla hit one all-time high after the other following its 5-for-1 stock split in August 2020, with the lowered share price making it easier for retail investors to buy into the company. Tesla was added to the S&P 500 index later that year, where it is currently one of only eight companies with a four-digit share price.
“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,” reads a report from Daniel Ives, an analyst at Wedbush Securities. Ives currently has a price target of $1,400 USD on Tesla’s shares.
Tesla stock fell after CEO Elon Musk announced he had once again tested positive for COVID-19, and the company has also been forced to suspend production at its Shanghai Gigafactory until April 1 due to China’s largest COVID-19 outbreak in two years.
News of the stock split has sent Tesla shares up 7.5% for the day, trading at $1,087 USD at the time of writing.
