Elon Musk’s Tesla will split its shares after the stock surged 500% in the 12 months, making it the world's most valuable automaker.
Elon Musk’s Tesla will split its shares after the stock surged 500% in the 12 months, making it the world’s most valuable automaker. Tesla said that its 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. Recently, retail investors have piled up on stocks and Tesla has been at the receiving end of the spiked interest from such investors. In July, Elon Musk was seen replying to Twitter users that he would consider discussing a stock split at the annual shareholders meeting.
Worth discussing at annual shareholders meeting
— Elon Musk (@elonmusk) July 1, 2020
The electric car manufacturer fixed August 21 as the record date for splitting the stock. “Each stockholder of record on August 21 will receive a dividend of four additional shares of common stock for each then-held share, to be distributed after close of trading on August 28,” Tesla said in a regulatory filing. The trading of the stocks after the split will begin on the last day of trading this month. The company follows Apple in making such an announcement, after the iPhone manufacturer earlier last month said it would split the stock 4-for-1.
Tesla’s market capitalization currently stands at $256 billion, the stock has surged over 7,000% since listing on the bourses. According to reports, Tesla’s stock is a hot favourite among Robinhood investors — who have bought stocks since the coronavirus pandemic brought down valuations. Tesla’s stock price has jumped 280% since March this year.
A stock split could take Tesla’s stock surging higher, something that Apple has benefited from in the recent days. After announcing that it would split its shares four-for-one, Apple has seen renewed investors’ interest taking the stock 15% higher to trade at $437 on Tuesday. Tesla’s first quarter results saw the electric vehicle manufacturer report a fourth consecutive quarter of beating estimates.