The massive rally of Tesla Inc!. stock price has forced the company to perform a 5-1 stock split. Tesla investors will receive four extra shares for every share held after the close bell on August 28th, 2020.
Tesla, Inc. (“Tesla”) announced today that the 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. Each stockholder of record on August 21, 2020 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, 2020. Trading will begin on a stock split-adjusted basis on August 31, 2020.
Certain statements, including, without limitation, statements regarding the expected timing and impact of the stock dividend are “forward-looking statements” that are subject to risks and uncertainties. These forward-looking statements are based on management’s current expectations. Various important factors could cause actual results to differ materially, including the risks identified in our filings with the Securities and Exchange Commission, including our Quarterly Report on Form 10-Q for the quarter ended June 30, 2020. Tesla disclaims any obligation to update this information.Tesla
In comparison with Apple, Apple announced a 4-for-1 stock split after the close on July 30 when the stock was trading around $370, Apple stock is now trading around $450, just about two weeks after the announcement.
Arithmetically Tesla shares would be worth around $297 after the split on August 28, 2020, which is just a little bit above what Tesla stock price was trading at just a year ago.
Tesla is presently trading around 1,462.33 +87.94, up 6.40% in after-market trading.
According to Credit Suisse analyst Dan Levy in a note to investors on Tuesday, the split will make share pf the electric vehicle maker more accessible to both retail investors and Tesla employees, noting the high stock price “may have been a barrier for retail” investors.
“At a time where the appetite for the stock and overall EV story continues to gain momentum, I think it’s a smart move,” said Dan Ives, an analyst at Wedbush who rates the shares the equivalent of a hold. Tesla’s move follows a similar split by Apple Inc., which Ives said other tech giants are likely to emulate.