Text size
Tesla will request approval for the split at its coming shareholder meeting.
Joe Raedle/Getty Images
Tesla
laid the groundwork on Monday to split its stock again, and investors looked pleased. Based on what happened last time Tesla split its stock, there is a good reason for investors to be happy.
Tesla (ticker: TSLA) stock was up 5.8% at about $ 1,069.52 a share in early trading. The
S&P 500
was off about 0.1%, while the
Dow Jones Industrial Average
slipped 0.2%
The news came in a regulatory filing that indicated the company will request stockholder approval at its coming annual meeting to increase the number of authorized shares of common stock “in order to enable a stock split.”
Tesla’s board has approved the plan to increase the amount of authorized stock, but the board hasn’t approved the actual stock split yet.
Tesla announced a 5-for-1 stock split in early August 2020. Shares gained an incredible 80% from just before the split announcement until the time the split became effective at the end of August. The run that pushed the stock up that much happened over about three weeks.
Both the possible split referred to Monday and the 2020 split are, technically, stock dividends. “The Board of Directors has approved and declared a five-for-one split of Tesla’s common stock in the form of a stock dividend to make stock ownership more accessible to employees and investors,” read Tesla’s press release back in 2020.
The number of common stock outstanding shouldn’t matter all that much, but there is the point Tesla makes…
..
