Smart talk plans

Tesla plans another stock split, stock jumps and Musk wants to launch a social media platform

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Tesla will ask shareholders to vote at this year’s annual meeting to authorize additional shares to allow for a stock split, the company just announced in a tweet. The news sent the stock jumping 5.7% in premarket trading on March 28. The stock is down 15.7% since the start of the year.

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“On March 28, 2022, Tesla, Inc. announced its intention to seek shareholder approval at the upcoming 2022 annual meeting of shareholders for an increase in the number of common shares authorized through a certificate amendment. company’s amended and restated incorporation to allow for a stock split of the Company’s common stock in the form of a stock dividend Tesla’s board of directors approved management’s proposal, but the dividend in stock will depend on final board approval,” according to a Securities and Exchange Commission (SEC) filing.

Tesla would join companies like Amazon and Alphabet, which announced a 20-for-1 stock split in March and February respectively, also pushing those two stocks higher at the time.

A spin-off would allow more investors to afford to invest in Tesla and expand the company’s audience and reach.

“With the company’s latest 5:1 stock split launched in August 2020 and given the stock’s meteoric run, it’s no surprise that Musk & Co. are heading for another stock split, in especially with strong demand for electric vehicles and the construction of the Berlin and Austin Giga flagship plants are now on track,” Wedbush Securities Dan Ives told GOBankingRates. “We view Tesla’s move following Amazon, Google, Apple and the launch of its second stock split in two years as a smart strategic move that will be a positive catalyst for stocks going forward. .”

Wedbush said it is maintaining its outperform rating on the stock and its price target of $1,400.

Barron’s reports that Tesla shares gained an incredible 80% just before the announcement of the 5-for-1 stock split in August 2020 until the split became effective in late August. The run that pushed the stock so high took place over about three weeks.

Tesla stock was around $500 per share when the 2020 split became effective. Shares closed at $1,010.64 on Friday. Another 5-to-1 split would put the stock around $200. At that price, Tesla stock would even fit into the Dow Jones Industrial Average, Barron’s added.

In other Elon Musk-related news, the CEO of Tesla and the richest man on the planet says he plans to launch a social media platform.

Musk responded to a Twitter user asking if he would consider creating a new social platform “that would consist of an open-source algorithm, where free speech and respect for free speech comes first, a where the propaganda is very minimal. Musk replied, “I’m seriously considering this.”

Related: Amazon Stock Could Get Much Cheaper With 20-to-1 Stock Split
More: How much does a Tesla cost? Price breakdown by model

This follows Musk’s contentious relationship with the SEC over his tweets, which will need to continue to come under scrutiny, as GOBankingRates has previously reported.

“As long as Musk and Tesla use Musk’s Twitter account to disclose information to investors, the SEC can legitimately investigate matters relating to Tesla’s disclosure controls and procedures, including Musk’s tweets about Tesla, as well as the “accuracy of Tesla’s public statements regarding its controls and procedures,” the SEC said in a court filing earlier this month.

The SEC said it had a “legitimate purpose” to investigate whether Tesla had institutional controls over its corporate disclosures and whether Musk complied with them.

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About the Author

Yael Bizouati-Kennedy is a former full-time financial journalist and has written for several publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She has also worked as a VP/Senior Content Writer for major New York-based financial firms, including New York Life and MSCI. Yael is now independent and most recently co-authored the book “Blockchain for Medical Research: Accelerating Trust in Healthcare”, with Dr. Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, including one in journalism from New York University and one in Russian studies from Toulouse-Jean Jaurès University, France.