In recent news, Tesla has added about $84 billion to its stock-market value on Monday, more than Ford Motor Co.’s entire market capitalization, after the electric-vehicle manufacturer stated that it is planning a second stock split in about two years. The company announced in a filing that it would hold a vote at its upcoming annual shareholder meeting to increase the number of authorized shares in order to facilitate a stock split signal.
Tesla will ask shareholders to vote at this year’s annual meeting to authorize additional shares in order to enable a stock split.
— Tesla (@Tesla) March 28, 2022
Tesla Works to Increase the Company’s Stock-Market Value
The latest development in the stock-market value was announced via a tweet, which helped to add further fuel to a recent rally in Tesla’s stock. The electric vehicle manufacturer is the biggest gainer on the NYSE FANG+ Index this year. On Monday, the shares of the company closed up 8% at $1,091.84, the highest level since Jan. 12. The last time Tesla split its stock was in August 2020. Its share price increased a staggering 743% that year, and the split was usually cited among one of the reasons that prompted the gains.
Furthermore, companies split their shares to make their stock prices appear less expensive and appeal to more investors. However, splitting a stock does not affect its underlying fundamentals. Tesla was the most traded stock among Fidelity’s online brokerage customers on Monday, with buy and sell orders almost evenly split, indicating that retail investors are cautious about the company’s stock-market value.
Tesla Following the Likes of Amazon, Google and Apple
A business analyst at Wedbush, Daniela Ives stated that he is not surprised that the company is heading for another stock split signal, especially with the robust EV demand and the build-outs of the “flagship Berlin and Austine Giga factories now on a glide path.” He further stated, “We view Tesla’s move following the likes of Amazon, Google, and Apple and initiating its second stock split in two years as a smart strategic move that will be a positive catalyst for shares going forward.”
Read more: Elon Musk Gets Warned by US Regulators to Use Caution in his Tweets About Tesla
Source: Livemint
