Tesla to Pursue Stock Split After 2 Years... Shares Surge Over 8%

[Image source=AP Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] American electric vehicle company Tesla is planning a stock split for the first time in two years.

On the 28th (local time), according to the Wall Street Journal (WSJ) and others, Tesla announced through a filing with the U.S. Securities and Exchange Commission (SEC) released that day that it plans to ask shareholders at the annual general meeting to approve an increase in the number of issued shares.

Tesla confirmed, "We will request an increase in authorized shares (the total number of shares a corporation can issue in the future) to allow a stock split of the company's common stock in the form of a stock dividend."

However, Tesla did not disclose the specific timing or ratio of the stock split. Tesla usually holds its shareholders' meeting in the fall.

This move follows Alphabet, Google's parent company, and Amazon, which each announced plans to split their stocks 20 to 1. Tesla previously split its stock 5 to 1 in August 2020. At that time, Elon Musk, Tesla's Chief Executive Officer (CEO), explained that the split was to increase stock accessibility for employees and investors.

A stock dividend refers to a dividend paid to shareholders in the form of additional shares rather than cash. It does not affect the company's market capitalization but can dilute the stock price.

Tesla's stock price surged last year despite the global supply chain crisis. However, the stock market took a direct hit due to Russia's invasion of Ukraine, causing a decline of about 4% this year. Nevertheless, WSJ added that it is still about 60% higher compared to a year ago. This announcement drew attention as it came while Tesla's Shanghai factory temporarily halted operations due to Shanghai's rotating city lockdown measures.

As of 3:24 p.m. that day, Tesla's stock price on the New York Stock Exchange was trading above 1092, up more than 8% from the previous close.

Meanwhile, CEO Musk announced on Twitter that he tested positive for COVID-19. This is his second confirmed case since 2020.

This content was produced with the assistance of AI translation services.