Sunday, November 27, 2022
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Tesla confirms a new stock split

The electric vehicle manufacturer intends to split its stock again to make it more accessible to investors and give it momentum on Wall Street.

It is an operation that has an air of deja vu. After the success of a first division of its action in the summer of 2020, Tesla confirmed last Friday at the close of the markets that it wanted to put the cover back. If the intention had already been announced last March, the group has now specified that this time it will be a question of a division by three of its shares. The decision will be submitted to the vote of shareholders at the general meeting of the group, scheduled for August 4.

The operation that does not change the total value of the company, since it only changes the number of shares in circulation, aims to make the title more accessible to investors. Tesla is thus betting that at a lower price, its action will attract new small shareholders.


Tesla said it wanted to split its stock by three.

The course no longer benefits

Tesla stock

however, did not take advantage of this on Monday, given the decline in its stock in a market tinged with bright red. A decline that does not seem to stop since the beginning of this year, since it has meanwhile lost more than 35% of its value to fall back below the $700 mark since the end of last month.

When the company led by Elon Musk had for the first time mentioned this new division of its action last March, its title had however reacted very positively, like the first division of its title in the summer of 2020. Between the announcement of this first division by five of its action and the moment when this division had become effective, approximately three weeks later, the stock had soared 60%. She was then still strongly appreciated, since the Tesla’s price had completely doubled to reach more than 1,000 dollarsthe level at which it has since peaked.

Stock splits have been on the rise lately on Wall Street, but their success seems increasingly mixed.

Outdated operation?

The stock split operationswhich is called “stock split” in the jargon, have multiplied lately on Wall Street, especially in the head of the giants of Big Tech. But their success seems more and more mixed lately, at a time when the rise in interest rates has proved to be particularly penalizing for these players on the stock market. Alphabet

and Amazon

unveiled 20-to-1 stock splits in February and March, respectively. Since then, shares in the former have lost 25% and even 37% for the latter, more than the pullback of around 20% for the broader S&P 500 index.



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