Tesla could split its shares… and soar on the stock market

Tesla seeks to achieve a new split (“split”) of its title. In a regulatory document, Elon Musk’s firm indicated on Monday March 28 that it wanted to increase the number of shares in circulation, which should allow a reduction in their nominal value via the distribution of a dividend in the form of shares. The proposal, approved by the board of directors, must be validated by the shareholders at the annual general meeting. More details should be communicated when the date and place of it are revealed.

Following this announcement, Tesla shares climbed 6.28% to $1,074.11 on the New York market, taking first place in the S&P 500. The electric vehicle manufacturer had already carried out such an operation. in the summer of 2020 in order to make its action more accessible to employees and small investors. The title, which then evolved to nearly 1,500 dollars, had seen its nominal value divided by 5.

The “split” used by other Wall Street stars

Tesla isn’t the only Wall Street star to split its stock price in recent years. This was also the case for Alphabet, Amazon and even Apple, whose capitalizations had reached stratospheric levels, after the sharp rise in their stock market prices during the COVID-19 pandemic, Boursorama reported on Monday March 28. This prospect of a “split” allows investors not to take offense at the information reported by Reuters, according to which Tesla has decided to suspend production at its Shanghai factory for 4 days due to the containment measures taken by the Chinese authorities.

In 2021, the group became the first American automaker to cross the 1,000 billion dollar mark in market capitalization, thus entering the very select club of companies worth more than 1,000 billion dollars on the stock market. The group has never distributed a dividend and had already declared several years ago that it did not plan to pay any in the near future, explaining that it favored the reinvestment of its profits to finance its growth.

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