Tesla Stocks Soar As Elon Musk’s Company Announces Stock Split

by Suzanne Halliburton
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Tesla stock got a huge bump Monday when the company revealed in an SEC filing that it planned a stock split for shareholders.

A filing with the Securities and Exchange Commission said Elon Musk’s Tesla will ask at its annual shareholders’ meeting “for an increase in the number of authorized shares of common stock.” The filing said it was doing so “in order to enable a stock split of the Company’s common stock in the form of a stock dividend.”

At a Glance: Tesla Requests Stock Split

  • In an SEC filing, Tesla said it plans to ask shareholders to vote on split
  • Shares jumped by eight percent, ending at $1,091.84
  • Last stock split was in August 2020.

If you’re checking for a stock bargain, look elsewhere. Tesla stock increased by more than eight percent during Monday trading. It ended the day at 1,091.84. That was more than an 8 percent jump. In after-hours trading, the price of Tesla stock increased even more. Monday night, the price was $1,095.65. It opened at $1,065.

A stock dividend is when a company pays shareholders with more stock. It’ll decrease the price of the stock, but an investor receives more shares in return. So it’s usually a win-win. As CNBC explained, if it’s a 6-for-1 split, a shareholder receives five more shares. Tesla shareholders will vote on the split later this year.

The last time Tesla issued a stock split was August 2020. That was a 5-for-1 deal. In the days after the split was announced, the stock price increased by about 80 percent.

Yahoo Finance noted that at the time of the last stock split, Tesla traded for $1,300. After the company announced the split, prices zoomed to about $2,000. The market cap was $400 billion. Nearly two years later, that cap is approaching $1 trillion.

“Given the stock’s meteoric run it’s not a surprise that Musk & Co. are heading down the path of another stock split,” said Dan Ives, a Tesla analyst for Wedbush.

Ives specifically mentioned a “robust” demand for electric vehicles. Tesla opened a factory in Berlin last week. And the company is readying for the grand opening of its Austin Giga factory.

But it wasn’t all good news for Tesla. Elon Musk announced he’d tested positive for COVID. Musk tweeted: “Covid-19 is the virus of Theseus. How many gene changes before it’s not Covid-19 anymore? I supposedly have it again (sigh), but almost no symptoms.”

And as the business week opened, the company suspended its production at a factory in China. That’s because the Chinese government locked down Shanghai. The city is undergoing another surge of cases, so all businesses closed as the city tightened pandemic restrictions. Tesla already experienced two days of shutdowns this month because of COVID.

CNBC said the shutdown could last for four days.

Tesla employs nearly 100,000 people, worldwide. It generated $53 billion in revenue in 2021.

There is no date, as yet, for the shareholder meeting to approve the stock split. The Wall Street Journal said Tesla’s annual meeting usually is in the fall.

Outsider.com