What Tesla’s stock split means for shareholders

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”.

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.

Tesla Stock Split to Occur Aug. 24 After Shareholders Approve Plan

Our community is about connecting people through open and thoughtful conversations. We want our readers to share their views and exchange ideas and facts in a safe space. Tesla’s stock has risen over 30% since announcing the proposed stock split in June.

NASDAQ: TSLA

As audience members yelled out suggesting various states and countries, Musk responded jokingly. “I’m half Canadian, so maybe.” Tesla currently has plants in California, Berlin, and Shanghai. This vote comes on the heels of Musk’s ongoing entanglement with his now rescinded offer to buy Twitter and a disappointing quarter for the company.

Does this stock split affect Tesla’s business in any way?

• Theoretically, the split means that more retail investors will be able to afford Tesla stock, but those investors are minuscule compared with institutional investors, and fractional shares were already available to smaller investors.
• A stock split is cosmetic and could mean that smaller investors feel they can afford the stock, but those investors are minuscule compared to major institutions.
• The The ISS argued that pledging of company stock by directors poses a risk to outside shareholders.

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 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).

While Trading Solutions Provider 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. 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.

Because stock price directly affects the weighting in this index, it’s a component considered for acceptance into the Dow. what is friedberg direct 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.

Thursday evening, Tesla shareholders completed the vote 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 iq option broker review leading up to the event.

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.

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.