The stock split will take effect on Aug. 25, and each shareholder of record on Aug. 17 will receive an additional dividend of two shares of common stock on Aug. 24, according to Tesla’s SEC filing on Friday. Distribution after market close. Trading will begin on Aug. 25 on a stock-split-adjusted basis.
The four-month gap between the initial announcement and the vote proved beneficial, and a rebound in growth stocks lifted the Nasdaq 100 19% from its June lows,Tesla has outperformed other tech stocks and the S&P 500, rising more than 38% from its late May lows.
Roth Capital Partners analyst Craig Irwin said,Tesla’s stock split timing looks impeccable,The shareholder vote comes at a time when “the market appears to be heading in the right direction.”
Tesla’s recent rebound has been helped by strong second-quarter results and the Biden administration’s climate change bill, which aims to promote the use of clean energy through a series of tax incentives.
At the same time, Vanda Research data shows that,Tesla retail investors swooped in ahead of the stock split vote.
Still, most of the risks that plagued the company earlier this year remained, with supply chain disruptions far from resolved and Musk embroiled in a lengthy and costly legal battle with Twitter. Also, stock splits by giants like Alphabet and Amazon haven’t given it a meaningful boost.
It is worth mentioning that Tesla’s last stock split was two years ago, and Tesla conducted a 1-for-5 stock split in 2020. In the last stock split, Tesla shares soared 60% between the announcement of the planned split and the date of its execution, as retail investors flocked to it, making it the stock with the most buy orders on Fidelity’s retail trading platform .
Generally speaking, although stock splits generally do not change the company’s market value or affect the value of shareholders’ investments, it can reduce the investment threshold for retail investors to a certain extent, thereby increasing the attractiveness of the company’s stock to retail investors.