In an effort to pay a stock dividend to investors, Tesla is asking permission from its shareholders to split the company’s stock for the second time in less than two years.
The request by Tesla will take place later this year at the annual shareholder’s meeting. It is presently unclear exactly how many additional shares company investors would acquire in a dividend.
Tesla’s stock once again jumped following the announcement on Monday morning, increasing to $1,093 per share by 11 a.m. EST.
Just two weeks ago, the electric car company’s stock was trading at $766, a considerable drop since closing on January 3, the first day of 2022 trading, at $1,199 per share.
Tesla’s only other stock split took place in August 2020, when shareholders were the beneficiaries of a 5-for-1 stock split.
In that earlier split, Tesla’s stock jumped enough for the company’s shares to be added to the S&P 500 Index later in 2020. The split came during a year in which the company’s stock jumped by 743%.
Tesla is currently one of only eight S&P companies trading at a share price of four digits, with a Wedbush Securities analyst estimating a $1,400 target price.
“We view Tesla’s move following the likes of Amazon, Google, Apple and initiating its second stock split in two years as a smart strategic move that will be a positive catalyst for shares going forward,” said Daniel Ives of Wedbush in a research report.
That endorsement is in line with the projections made by Tesla in January, when the company offered a projected annual sales growth of 50% or more over the next few years.
The report was prompted partly because Tesla opened a new Gigafactory just outside of Berlin last week. The company is scheduled to hold a grand opening at its massive plant near Austin, Texas, on April 7.
Approximately 15,000 people have been invited to the opening event showcasing the 4.3-million-square-foot plant, which cost an estimated $1.1 million. The facility has already begun to produce Tesla’s Model Y vehicle.
The surge in growth for Tesla comes at a time in which the company’s current size pales in comparison to other major car manufacturers. Regardless, the company’s current value is greater than the world’s thirteen largest automakers combined.
