Shares of Tesla rose sharply Monday after the electric car maker announced its second stock split in less than two years.
The company said in a regulatory filing, and also in a tweet, that it plans to make a request at its upcoming annual shareholders meeting to increase its number of authorized shares so that it can split the stock in the form of a dividend.
Shares jumped more than 5 percent at the opening bell.
Tesla’s shares have rocketed higher in recent months and are up more than 60 percent during the past year. A single share now costs more than $1,000.
And the company is growing. It opened its first European factory last week, a “Gigafactory” in Germany that will employ 12,000 people and produce 500,000 vehicles a year.
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
“Given the stock’s meteoric run, it’s not a surprise that Musk & Co are heading down the path of another stock split, especially with robust EV demand and the build-outs of the flagship Berlin and Austin Giga factories now on a glide path,” said Dan Ives, who follows Tesla for Wedbush.
Tesla Inc said that its board has approved the proposal, but that the dividend is contingent on final board approval.
Tesla had a five-for-one stock split in September 2020, which went into effect one day after the company announced that it planned to sell up to $5bn worth of its stock. Just three months later, Tesla said that it was planning another stock sale, looking to raise up to $5bn in that offering.
Tesla follows other tech giants that have seen the price of shares vault out of reach of most investors.
“We view Tesla’s move following the likes of Amazon, Google, 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,” Ives wrote in a research report.
In a filing with the Securities and Exchange Commission, Tesla said it would include more information, including the date and place of its annual shareholder meeting, in an upcoming proxy statement.