By Dhirendra Tripathi
Investing.com – Tesla stock (NASDAQ:TSLA) was 5% higher in premarket trading Monday, as the company initiated measures aimed at a stock split.
The company announced that its board has approved an increase in the number of authorized shares to enable a split in the form of a stock dividend.
While the stock dividend will be contingent on final board approval, the company will seek shareholder consent for the increase in its authorized share capital at its upcoming annual general meeting next month.
The stock closed 0.3% lower Friday at $1,010.64, giving the company a market cap of over $1 trillion.
Tesla’s equity base comprises 1.03 billion shares. Its shares are up over 63% in the last year compared to 7.8% gains in the Nasdaq Composite, a reflection of the rapid embrace of electric vehicles the world over.
Tesla last split its stock in August 2020 at a 5-for-1 ratio. The stock has more than doubled since then.
A split doesn’t change anything fundamentally for the stock, but does make it accessible to more retail investors who tend to buy stocks based on their absolute value, ignoring their real value.