Although the company’s stock has doubled in value since the previous split, TSLA is down for the year thus far.
Tesla has indicated that it is exploring another stock split, but the decision will ultimately be made by investors, according to CNBC. Stock splits have grown in popularity among technology behemoths over the last several years. Amazon and Alphabet, the parent firm of Google, are set to separate later this year.
However, Tesla just divided its stock in 2020. (along with Apple). Therefore, why would the electric car manufacturer consider repeating the feat so soon? What you need to know is as follows:
What does a stock split entail? It occurs when a business decides to increase the number of accessible shares by splitting current shares by a fixed factor, such as two-to-one. For example, in a 2-to-1 split, each shareholder would now possess twice the number of shares, but each share will be valued 50% less.
When was the last time Tesla divided its stock? Tesla’s stock split for the last time on August 31, 2020. This was a five-for-one stock split.
How do we know Tesla is considering another stock split? Because the business today filed a Form 8-K with the Securities and Exchange Commission announcing its intention to call another stock split.
Who has the right to vote on the stock split? If you are a TSLA shareholder, you will almost certainly get the opportunity to vote on the measure during the company’s 2022 annual meeting of stockholders. The 2021 annual meeting occurred in October, implying that the 2022 gathering will occur around the same time this year.
By this time, how much would the stock have split? Tesla has not disclosed this, and it is unlikely that we will learn until close to or following the vote.
When is the stock going to split? Not until after the 2022 annual meeting of shareholders. If that occurs in October, Tesla stock will not split until at least the end of the year.
Why is Tesla seeking another stock split so soon? Elon Musk is the only one who knows for certain, although it may be to raise the stock. TSLA has quadrupled in value since the company’s previous stock split in August 2020, but is down more than 4% year to date in 2022. Stock splits do not automatically raise the value of shares, but they can improve the appeal of a stock among retail investors owing to the lower price, which can cause shares to rise.