Tesla Inc will seek investor approval to increase its number of shares to enable a stock split in the form of a dividend, the electric-car maker said on ...
Register now for FREE unlimited access to Reuters.com The stock split, if approved, would be the latest after a five-for-one split in August 2020 that made Tesla shares cheaper for its employees and investors. Register now for FREE unlimited access to Reuters.com Register now for FREE unlimited access to Reuters.com
This split would come in the form of a dividend, which would pay shareholders additional shares. Most dividends pay cash to investors. The electric car maker ...
But it's rapid growth — the company projects annual sales increases of 50% or greater But that split came in the midst of an historic run for Tesla shares, which gained 743% Stock splits do not fundamentally change the value of a company. Given the various options available for retail investors to buy just a fraction of a share of individual companies with high stock prices, such as index funds and ETFs, a stock split isn't as crucial as it once was. But most companies — other than Berkshire Hathaway — don't want to let their individual share price get too high. Last year the shareholders' meeting was held October 7.
The SEC filing said the electric car maker will ask at its annual shareholders meeting “for an increase in the number of authorized shares of common stock ...
That said, it jumped 49.8% in 2021 and surged 743.4% in 2020. These dividends do not affect the value of a company, but they dilute its share price. The news comes as Tesla's stock has struggled this year, slipping 4.4% for 2022 through Friday's close. This would be a one-time event. The Securities and Exchange Commission filing said the electric car maker will ask at its annual shareholders meeting "for an increase in the number of authorized shares of common stock ... in order to enable a stock split of the Company's common stock in the form of a stock dividend." - The SEC filing said the electric car maker will ask at its annual shareholders meeting "for an increase in the number of authorized shares of common stock ... in order to enable a stock split of the Company's common stock in the form of a stock dividend."
Tesla's is seeking approval for a stock dividend; however, "stock dividends" have much more in common than stock splits than cash dividends.
Stock dividends, unlike cash dividends, dilute the value of each share like a stock split. When stocks split, the markets adjust immediately, changing the price of the stock so that investors have the same overall amount of value, while simply having more shares, each of which is less valuable. In its latest 8K filing with the Security and Exchange Commission (SEC), Tesla, Inc. ( TSLA) announced that it plans to seek approval for a stock dividend during its Annual Shareholders' Meeting to be held later this year.
Shares of Tesla are up sharply after the electric car maker announced its second stock split in less than two years.
Alphabet, Google's parent company, announced a 20-for-1 split in February Amazon.com Inc. said this month that it would do a split of the same ratio. Tesla had a 5-for-1 stock split in August 2020, which went into effect one day after the company announced that it planned to sell up to $5 billion worth of its stock. It can push up the price of a company's stock, at least temporarily, and the announcement did just that on Monday.