Founder and CEO of Tesla Motors Elon Musk speaks during a media tour of the Tesla Gigafactory, which will produce batteries for the electric carmaker, in Sparks, Nevada.
James Glover II | Reuters
Tesla wants to split its stock so it can pay a stock dividend to shareholders, according to a filing Monday.
The Securities and Exchange Commission filing said the electric car maker will ask at its annual shareholders meeting “for an increase in the number of authorized shares of common stock … in order to enable a stock split of the Company’s common stock in the form of a stock dividend.”
A stock dividend is a dividend paid to shareholders in the form of additional company shares instead of cash. These dividends do not affect the value of a company, but they dilute its share price.
Shares were up 4.5% in premarket trading to about $1,055.99.
Tesla last split its stock in August 2020. The stock has more than doubled since that 5-for-1 stock split took effect on Aug. Aug. 31, 2020.
The news comes as Tesla shares have struggled this year, slipping 4.4% for 2022 through Friday’s close. That said, the stock jumped 49.8% in 2021 and surged 743.4% in 2020. Shares of Tesla have also risen in each of the last five years.
The move also follows a Bloomberg News report that said Tesla will halt production in its Shanghai factory due to a Covid-19 lockdown in China.