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Tesla adds to the wave of megacap stock splits

On January 12, 2019, the driver will charge the battery of the Tesla car at the Tesla Super Charging Station at the gas station on the highway of Saiy Fribaud Court in France. REUTERS / Pascal Rossignol / File Photo / File Photo

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March 28 (Reuters)-Tesla (TSLA.O) announced on Monday that it will seek shareholder approval to increase the number of shares to enable a stock split. Investor.

Tesla said in its filings that it would vote at the next annual shareholders meeting to increase the number of shares approved to enable a stock split.read more

The stock split approved by Tesla’s board of directors is the second electric vehicle manufacturer since 2020 and will follow the announcement of a stock split by other major US companies in recent years.

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Over the last two years, Apple (AAPL.O), Nvidia (NVDA.O) and Tesla (TSLA.O) have split their shares, but Amazon (AMZN.O) and Google’s parent Alphabet (GOOGL.O) ) Recently split its shares Announced a future stock split.

Megacap stock split

Companies split their stocks to make their stocks look cheaper and appeal to more investors, but splitting stocks doesn’t affect the underlying fundamentals.

Still, BofA Global Research found in a recent study that a stock split was “historically bullish” for the company that enacted it, with an average return of 25% a year later, while the market as a whole It states that it is 9%.

Tesla’s share price surged 8% on Monday, adding more than $ 100 billion to the stock market value.

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Amazon has increased by about 20% since March 9, when e-commerce heavyweights announced a stock split that took effect on June 6. This is compared to a 7% increase in Nasdaq (.IXIC) over the same period. Street has also seen significant recovery in megacap growth stock following losses earlier this year, as well as fluctuations associated with rising interest rates and Russia’s invasion of Ukraine.

Tesla is the most traded stock among Fidelity’s online brokerage clients on Monday, with buy and sell orders split almost evenly, suggesting that individual investors are cautious about the company.

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Since joining the S & P 500 in December 2020, Tesla has been one of the heaviest stocks and now accounts for more than 2% of the index. It has increased by about 300% since the announcement of the first stock split in August 2020.

Analysts say analysts may suggest a future stock split announcement for other S & P 500 companies with nominally high stock prices, up 0.1% on Monday to $ 1,558 Chipotle Mexican Grill ( Includes CMG.N) and Booking Holdings (BKNG.O). , Is trading almost flat at around $ 2,247.

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Report by Noel Randewich; edited by Cynthia Osterman

Our Criteria: Thomson Reuters Trust Principles.

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