Tesla has confirmed that it is planning another stock split. According to the electric car manufacturer, it will ask its shareholders for approval for this at the next annual general meeting.
Tesla had already split its stock in 2020. The company value does not change due to the stock split – but since the company value is distributed over significantly more shares, each share only has a smaller share in the company. This means that the share is automatically worth less.
At that time, the share was split in a ratio of 1:5, i.e. each shareholder received a dividend of four additional ordinary shares for each share held. Instead of one share with a value of 1,000 dollars, the investor then had five shares each worth 200 dollars in the securities account, to give an example.
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Tesla has not yet named a concrete ratio for the planned split. In recent months, however, the share price rose above 1,000 dollars again.
With the stock split, Tesla primarily wants to lower the barrier to entry for a possible investment, which will probably mainly affect small investors. The stock split will hardly affect large investors, who deal with higher amounts anyway. The aim is to make it possible for more employees and investors to become shareholders, as Tesla already explained in 2020.
One difference is that back then, Tesla was still able to decide on the stock split on its own. But since the number of authorised shares is now too high, shareholder approval is required at the annual general meeting. A precise timetable for how quickly the split could be completed after a resolution has been passed is not yet known.
teslarati.com, electrek.co
Keyword: Tesla gears up for stock split