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The filing also says that Tesla CEO Elon Musk currently holds 23.5% of Tesla shares and Vanguard holds 6% of Tesla shares. Musk sold a considerable chunk of his Tesla holdings since late 2021, in part to shore up a stake in Twitter, the social networking giant he agreed to acquire for around $44 billion. Shares of Tesla were up by more than 1% after-hours having closed at $696.69 on Friday. Tesla, Inc. is an American company that manufactures and sells electric cars, as well as power storage and photovoltaic systems. The company’s goal is to “accelerate the transition to sustainable energy”.
Tesla’s 3:1 Stock Split Goes Into Effect—Here’s What It Means For Investors
Forward stock splits help reduce the share price of a stock, while a reverse stock split can increase a publicly traded company’s share price. Forward stock splits are what usually get investors excited, because a company wouldn’t be enacting a split if it weren’t executing well and out-innovating its competition. Tesla says that reducing the market price of its common stock through a split will give its employees “more flexibility in managing their equity.” The company believes increasing employee satisfaction in this manner may help to maximize stockholder value.
Because stock price directly affects the weighting in this index, it’s a component considered for acceptance into the Dow. Companies with high share prices may not be admitted if they would disrupt the weighting too greatly. Over the past month, Tesla stock has surged, rising more than 6% as of early trading on Tuesday.
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Shareholders voted to approve the 3-for-1 Tesla stock split at the company’s annual meeting on Aug. 4 in Austin, Texas. The fourth thing to note, following the completion of the Tesla stock split, is that the company remains exceptionally expensive, compared to legacy auto stocks. While things have certainly not gone Wall Street’s way in 2022, the investing community has still managed to find a bright light amid a gloomy situation. 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, 2022.
Tesla stock set for 3-for-1 split after market close
While a stock split theoretically should not alter the valuation of all shares outstanding, lowering the price per share may attract more potential buyers, boosting the stock’s aggregate valuation somewhat. The 3-1 split comes on the heels of even more good news for Tesla shareholders. raspberry pi pico vs esp32 Senate’s Inflation Reduction Act of 2022, the significant tax credits could be available to Tesla car buyers. The existing credit was phased out after a carmaker sold 200,000 electric vehicles.
Tesla also expects that reducing the share price through a stock split will make its common stock more accessible to retail investors, which it sees as a positive development. Each stockholder of record on August 17, 2022 will receive a dividend of two additional shares of common stock for each then-held share, to be distributed after close of trading on August 24, 2022. Think of stock splits as nothing more than window dressing that allows companies to 2021 state of software engineers make their shares more accessible for retail investors. It’s also a way of encouraging higher average trading volume, which CEOs like Elon Musk understand can keep Tesla at the heart of the conversation on online message boards and within investing communities. For example, if you owned 20 shares of Tesla at $890 per share as of this past weekend, your split-adjusted stake would be 60 shares of Tesla held (three times your existing position) at $296.67 per share (a third of the previous price).
As a writer, Michael has covered everything from stocks to cryptocurrency and ETFs for many of the world’s major financial publications, including Kiplinger, U.S. News and World Report, The Motley Fool and more. Michael holds a master’s degree in philosophy from The New School for Social Research and an additional master’s degree in Asian classics from St. John’s College. A 3-1 stock split could ensure more mom-and-pop investors can own a piece of the electric vehicle giant. Regarding institutional ownership, the stock is currently held by a wide range of different funds. At the time of this writing, Vanguard owned more than 65 million shares and Blackrock owned over 55 million, to name a couple of large institutional holders. The 3-1 stock split should change all that, and it could spur more retail investment in the company.
- (You can read Fortune’s explainer on stock splits here.) This follows on Tesla’s first stock split in August of 2020–which was a 5-for-1 split.
- Public companies are capped with respect to how many shares they’re allowed to have in circulation, which is enforced by the SEC.
- But even after approving the 3-1 proposal, Tesla’s stock is still down more than 28% year to date.
- Forward stock splits help reduce the share price of a stock, while a reverse stock split can increase a publicly traded company’s share price.
- Tesla’s share price and the number of shares it ultimately has outstanding have absolutely no impact on the company’s ability to produce and sell EVs or innovate.
If you owned one share of the company, on the day of the stock split, that one $300 share would turn into three $100 shares. A stock split divides existing shares into smaller pieces for greater accessibility. This causes the total share count to go up and the stock price to go down. You can picture a stock split as someone cutting a freshly made pizza; cutting the pizza into slices doesn’t change anything fundamentally, it just makes the pizza easier to share and eat. Below we’ll explain what a stock split is, how it affects investors and the share price, and why companies would be interested in pursuing a stock split.
There’s no question that retail investors, who’ve played a big role in pushing Tesla’s valuation to nearly $1 trillion, are the biggest winners of the company’s pending stock split. Like most auto stocks, Tesla is contending with semiconductor chip shortages and generalized parts shortages predominantly caused by the COVID-19 pandemic. In particular, lockdowns in various parts of China have curtailed production at Tesla’s Shanghai gigafactory. An outside proposal that failed would have enabled shareholders who held 3% or more of Tesla’s stock for at least three years to have a say in director nominations. Despite the board’s discouragement, shareholders passed a proposal to increase investor’s power in nominating directors on the board. Shareholder proposals to allow board directors to serve two-year terms and to eliminate supermajority voting requirements did not pass.
Thursday evening, Tesla shareholders completed the vote fxtm forex broker review to authorize the 3-for-1 stock split at the company’s annual shareholders meeting in Austin, Texas. The board of directors moved quickly to confirm the poll results and announce the stock split. Those who could not attend the meeting in person were able to cast their votes by proxy — or online — in the weeks leading up to the event.