‘Tesla shares are getting cheaper lately. Anyone interested in buying it? '
On Monday (Tuesday morning local time) Tesla Inc. announced that it would seek investor approval for its share split plan for the 2nd time in 2 years, further prompting a surge in the Wall Street technology index.
According to Tesla’s filing, it will hold a vote at its next annual shareholders ’meeting, to increase the number of shares allowed for share divisions.
Through Tesla’s official Twitter, it confirmed the company’s plans to get its shareholders ’approval.
As a result, Tesla shares jumped 4.9% to US $ 1,059.85 during the session in New York.
Tesla is said to be issuing a definitive proxy statement with details including the date and location of the annual meeting at a later date.
Meanwhile, if Tesla's share plan is approved by its board of directors, it will see the electric car company join other United States (US) firms that have also done the same in recent years.
Earlier, Apple Inc and Nvidia Corp had made a share split in the last 2 years, then followed by Amazon.com Inc as well as Google owned by Alphabet Inc.
As a matter of knowledge, the division of shares is made to attract more investors as it will make the share price cheaper.
Bank of America (BofA) Global Research’s research note said that stock divisions ‘have a bullish history’ for companies that execute them, with their shares marking an average return of 25% per annum compared to 9% for the entire market.
When Tesla made its first 5/1 share split in August 2020, the company’s shares had exploded higher and added to the S&P 500 index that year.
Daniel Ives, an analyst at Wedbush Securities, expects a positive outlook from the Tesla stock split and rated Tesla shares as ‘buy’ with a price target of $ 1,400.
