The Securities and Exchange Commission said the electric car maker would seek shareholder approval at the Annual General Meeting of Shareholders (AGM) for an increase in the number of authorized shares of common stock, to allow a stock split of the Company’s common shares in the form of stock dividends.
Stock dividends are dividends paid to shareholders in the form of additional company shares, not cash.
Then, this dividend has no effect on the value of the company, but weakens its share price.
The stock was up 4.5 percent in premarket trading to around $1,055.99. On Monday local time, Tesla shares were up more than 6 percent around US 1,075.
Tesla last conducted a stock split in August 2020. Its shares have more than doubled since the 5:1 stock split took effect on August 31, 2020.
The news comes as Tesla’s stock has struggled this year, slipping 4.4 percent for 2022 through Friday’s close, March 25, 2022.
Tesla shares jumped 49.8 percent in 2021 and jumped 743.4 percent in 2020. Tesla shares have also risen in each of the past five years.