Tesla will move forward with a 1-for-3 stock split and will pay a dividend to shareholders after the close of trading on August 24.
Yesterday, Tesla shareholders voted on a 1-for-3 stock split proposal and it was approved by a majority vote (more than 815 million shares in favor and 9 million against). Today, Tesla’s Board of Directors issued a press release announcing that the stock split will be made on August 24 for all shareholders of record on August 17.
Tesla, Inc. today announced that its Board of Directors has approved and declared a split of Tesla’s common stock into three in the form of a stock dividend to make the stock more accessible to employees and investors. each shareholder of record on August 17, 2022 will receive an additional dividend of two shares of common stock, which will be distributed after the close of business on August 24, 2022. The transaction will commence on August 25, 2022, on a stock split adjusted basis.
IT Home has learned that Tesla’s last stock split dates back to 2020 (1 for 5). At that time, Tesla’s share price was only $1,300, but with the announcement of the stock split, its share price was directly pushed up to an all-time high of $2,000 per share (up about 60% from the announcement date to the execution date), and Tesla’s market value also began to soar from then on, and reached its highest point a year later.
Now, Tesla will start another stock split, splitting 1 share into 3 shares. After today’s close, Tesla was down about 6% at $864.51 per share, with a market cap of about $902,972 million.
Typically, stock splits do not change a company’s market capitalization or affect the value of a shareholder’s investment, but they can go some way toward making a company’s stock more attractive to retail investors. Large companies lower their share prices to stimulate retail interest and lower the investment threshold, while investors often see stock splits as a sign of strong confidence from company management.
Since 2020, several tech giants with ultra-high market capitalizations, such as Apple and Nvidia, have undergone stock splits. Earlier this year, Google parent Alphabet announced a 1-for-20 stock split in its quarterly statement. In June, Amazon’s first stock split since 1999 went into effect, and the stock is once again trading in triple digits.
Last month, Tesla reported its second quarter earnings, and while revenue and earnings growth slowed significantly from the first quarter, they were still above market expectations, and its shares have rebounded 50% from their May lows, with a cumulative gain of 32% in July, the best month since October 2021.
