Model Y cars are pictured during the opening ceremony of the new Tesla Gigafactory for electric cars in Gruenheide, Germany, March 22, 2022. Patrick Pleul/Pool via REUTERS
March 28 – Tesla Inc (TSLA.O) will seek investor approval to increase its share count to accommodate a stock split in the form of a dividend, the electric carmaker said on Monday, sending its shares up about 5 %.
The proposal has been approved by the board and shareholders will vote on it at the annual meeting. The stock split, if approved, would be the latest after a five-for-one split in August 2020 that made Tesla stock cheaper for its employees and investors.
Alphabet Inc (GOOGL.O), Amazon.com Inc (AMZN.O), and Apple Inc (AAPL.O) have also recently split their stocks to make them more affordable following a pandemic-driven rally in tech stocks.
Tesla shares rise after 2020 stock split Tesla shares rise after 2020 stock split
“This[stock split]could further fuel the bubble in Tesla’s stock that has been brewing over the past two years,” said David Trainer, chief executive of investment research firm New Constructs.
Tesla has shipped nearly a million electric cars annually while ramping up production by building new factories in Austin and Berlin amid increasing competition from long-established automakers and startups.
“We think with Berlin ramping up and with both the MiniCar and India on the horizon, we would agree with the timing,” said Craig Irwin, an analyst at Roth Capital, suggesting that companies typically do stock splits when good news is forthcoming.
Meanwhile, Tesla told its suppliers and workers on Monday that its Shanghai factory in China will be closed for four days as the financial hub announced it would lock down in two phases to conduct mass testing for COVID-19. Continue reading
Reporting by Nivedita Balu and Akash Sriram in Bengaluru; Edited by Maju Samuel and Arun Koyyur