Tesla‘s shareholders voted to approve a 3-to-1 stock split during the company’s annual meeting in early August, and it is now set to be implemented after markets close on Wednesday. At the end of today’s trading, the value of Tesla shares will be divided by three, while the total shares will triple, according to Teslarati.
Based on where shares close on Wednesday, Tesla shares will officially start trading on a split-adjusted basis on Thursday. Note that at the beginning of June, Tesla announced that its Board of Directors had decided to implement a 3-to-1 stock split amid rumors that certain company shareholders had wanted splits as high as 25-to-1. The company’s 14A filings with the Securities and Exchange Commission claimed that the split “would help reset the market price of our common stock so that our employees will have more flexibility in managing their equity, all of which, in our view, may help maximize stockholder value.”
Tesla also pointed out that its retail shareholders brought up a future stock split repeatedly. “In addition, as retail investors have expressed a high level of interest in investing in our stock, we believe the Stock Split will also make our common stock more accessible to our retail shareholders.”
Tesla immediately announced after the Cyber Roundup Annual Shareholder Event at Gigafactory Texas that the 3-to-1 stock split would be in the form of a stock dividend after trading ended on August 24. It is worth noting that it is the company’s second stock split within two years. The first was a 5-to-1 stock split on August 31, 2020, which generated shares to $442.68 from $2,213.40.
According to the New York Times, Tesla shares were trading for $909.70. at 10:21 a.m. in New York, and if shares were to be split right now, the price would change to $303.23, but it is not possible as the trading today has not yet ended.
Over the previous month, Tesla stock has increased by over 13% impressively.
