Tesla (NASDAQ: TSLA) stock is set to split 3-to-1 after markets close on Wednesday. The price of Tesla shares at the end of trading today will be divided by a third, while the number of total shares will triple.
On Thursday, Tesla shares will officially begin trading on a split-adjusted basis, which depends on where shares close on Wednesday.
In early June, Tesla announced that its Board of Directors had moved to execute a 3-to-1 stock split, despite rumors of splits as high as 25-to-1 being requested by some company shareholders. The 14A filed with the SEC said the split “would help reset the market price of our common stock so that our employees will have more flexibility in managing their equity, all of which, in our view, may help maximize stockholder value.”
Tesla also noted its retail shareholders had spoken frequently about another stock split. “In addition, as retail investors have expressed a high level of interest in investing in our stock, we believe the Stock Split will also make our common stock more accessible to our retail shareholders.”
Tesla Shareholders approved the stock split when voting at the company’s Cyber Roundup Annual Shareholder Event at Gigafactory Texas earlier this month. The company announced just one day after the Cyber Roundup that the 3-to-1 stock split would occur in the form of a stock dividend after trading ended on August 24.
This is Tesla’s second stock split in the past two years. In August 2020, the automaker performed a 5-to-1 stock split, with prices adjusting on August 31, 2020. The split brought shares to $442.68 from $2,213.40. Tesla said this split was aimed toward giving new, young investors an opportunity to get their hands on full shares.
Tesla shares were trading at $909.70 at 10:21 a.m. in New York. If shares were to split right now, the price would adjust to $303.23. However, it will not split until the end of trading today.
Tesla shares are up nearly 13 percent over the past month.
Disclosure: Joey Klender is a TSLA Shareholder.
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