Tesla Inc. (NASDAQ: TSLA) stated on Monday, March 28th that they will ask for shareholders’ approval at the annual meeting to perform another stock split after the initial one that took place in August 2020.
The electric vehicle (EV) company did not define the ratio of the stock split nor the date of the split they would be targeting.
Retail investors might find Tesla stock even more appealing after the stock split, currently, the stock is trading at $1,067.5 which might be high for some investors. If the stock splits the price will be reduced by the factor of the split, allowing investors to pile in.
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Wedbush Securities analyst Dan Ives chimed in on the potential split stating:
“A stock split has been kind of rumored. The fact that they put it out there, I think this is going to be a massive catalyst for the stock over the coming months,” said Ives.
Covid scare a second time
Whatsmore, news of the stock split might offset news of the gigafactory in Shanghai being closed due to China ordering a Covid-triggered lockdown in the country’s largest city. With a population of over 26 million, the city might struggle to get the reemergence of Covid under wraps, with the city itself being split in half.
According to official data Tesla sold 116,360 China-made cars in the first two months of 2022 most of which were headed to Asia and Europe.
Effects on the stock
The stock seems to take any positive news around Tesla and turn it into a galloping march forward. As the charts show the stock is currently in an uptrend trading well above 20-50-200 Simple Moving Averages (SMAs).
Analysts predict that the stock split could be a positive catalyst for the stock moving forward. With the new gigafactory in Berlin opening up and the stock performing well it seems as if there is no end in sight to the stock’s relentless forward momentum.
With an eccentric CEO, global supply chain, cutting edge technology as well as new and innovative business models being employed Tesla seems to be poised for a wonderful future. Investors should not let Tesla out of their sight, because if the stock splits, there may still be an opportunity to get in on the action.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
