Tesla announces 5-for-1 stock split as share price surges
The stock split takes effect on Aug. 31
Electric car maker Tesla announced a five-for-one stock split on Tuesday in a bid to lower the barrier of entry of individual investors.
The stock split takes effect on Aug. 31. Stock splits are meant to make it easier to invest after periods of rapid growth in share prices.
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“Each stockholder of record on August 21, 2020 will receive a dividend of four additional shares of common stock for each then-held share, to be distributed after close of trading on August 28, 2020,” Tesla said in an 8-K filing.
Shares rose as much as eight percent in after-hours trading after the announcement.
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Tesla’s stock price has surged nearly 230 percent this year. In July, the company easily topped Wall Street’s expectations for its second-quarter results, reporting earnings per share of $2.18 and revenue of $6.04 billion.
The car marker has remained profitable in recent quarters despite the impact of the coronavirus pandemic. Tesla sold more than 179,000 cars during the first half of 2020, outpacing sales for its nearest three competitors in the electric car market combined, according to Electrek.
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Tesla is presently the world’s most valuable automaker, with a market capitalization of $256 billion. The valuation exceeds that of Ford Motor Company and Toyota combined.