Tesla (NASDAQ: TSLA) has announced that its Board of Directors has approved a 5:1 split for the company’s common stock in the form of a dividend. The move will make the ownership of TSLA stock more available for both employees and investors alike.
The electric automaker stated that each stockholder of record on August 21, 2020, will receive a dividend of four additional shares of common stock for each share that the investor held on that date. It will be distributed after the closing bell on August 28, 2020.
Trading will then begin on a stock split-adjusted basis on the following trading day, which is Monday, August 31.
Stock splits, or stock divides, are used to increase the number of shares in a company. The act of splitting a stock will decrease the market price of individual shares, but it will not affect the total market capitalization of the company that chooses to perform the split.
The move could help smaller investors afford TSLA stock, which has tripled in value since the beginning of the year.
TSLA stock closed at $1,374.39 today, but aftermarket trading has brought the price of the stock back up by nearly 6%. At the time of writing, the stock was being traded at $1,453.55.
Tesla’s statement on the stock split is available below.
PALO ALTO, Calif., Aug. 11, 2020 (GLOBE NEWSWIRE) — Tesla, Inc. (“Tesla”) announced today that the Board of Directors has approved and declared a five-for-one split of Tesla’s common stock in the form of a stock dividend to make stock ownership more accessible to employees and investors. Each stockholder of record on August 21, 2020, will receive a dividend of four additional shares of common stock for each then-held share, to be distributed after close of trading on August 28, 2020. Trading will begin on a stock split-adjusted basis on August 31, 2020.
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, 2020. Tesla disclaims any obligation to update this information.
Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.