The strength the Tesla stock experienced is backed by other fundamental news that is being attributed to the company
American electric vehicle and clean energy company Tesla Inc (NASDAQ: TSLA) has filed an application with the Securities and Exchange Commission (SEC) with respect to its proposed stock split in the form of a stock dividend.
According to the filing lodged on Monday, the company “announced its plan to request stockholder approval at the upcoming 2022 Annual Meeting of Stockholders (the “Annual Meeting”) for an increase in the number of authorized shares of common stock through an amendment to the Company’s Amended and Restated Certificate of Incorporation (the “Amendment”) in order to enable a stock split of the Company’s common stock in the form of a stock dividend.”
At the moment, Tesla’s Board of Directors “has approved the management proposal, but the stock dividend will be contingent on final Board approval.” The plans seem to be sitting well with the automaker’s investors as evident in the uptick in share price in the Pre-market with the Tesla stock up 6.58% to $1,077.
Tesla is not new to stock splits with the firm completing a 5-for-1 stock split back in August 2020. Following the move at the time, the company’s share valuation has grown by almost double, signaling a healthy disposition amongst investors despite the COVID-19 pandemic. This current stock dividend, however, has a slightly different motive as the proposed stock dividend is a dividend paid to shareholders in the form of additional company shares instead of cash.
Perhaps the stock split will aid the flailing Tesla stock in the coming quarters as the shares have lost so much value this year. In the Year-to-Date (YTD) period, Tesla is down by at least 4.4%, however, the stock has the potential to beat last year’s 49.8% growth record and over 700% in the previous year.
Tesla Stock Response to Production Halt in China
The Tesla stock closed Friday’s session down 0.32% as it navigated volatility experienced by tech stocks over the past week. While the stock is expected to continue on its downward sprint following the suspension of production activities at the company’s Shanghai GigaFactory due to the newly imposed lockdowns in China stemming from the raging cases of Coronavirus.
The suspension of activities, though confirmed for Monday based on a Reuters report citing people familiar with the matter, has no clarity as to whether it will be extended beyond Monday, as the factory workers have not yet been informed.
The strength the Tesla stock experienced is backed by other fundamental news that is being attributed to the company. In a tweet shared over the weekend, Chief Executive Officer Elon Musk said he is “Giving Serious” thoughts to the idea of creating a social media platform that will offer the right freedom of speech that befits a modern and democratic society.
Am giving serious thought to this
— Elon Musk (@elonmusk) March 27, 2022
Pulling all of the latest events that have happened to the company, investors have seen a wider gap between the gap and the bad events, choosing the good and as such, we are bound to see the implications on the share price in the near term.
Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.
