Tesla (NASDAQ: TSLA) announced that it is seeking shareholder approval to split its stock for the second time in two years. The move comes as the company seeks to pay a stock dividend to shareholders. Upon the announcement, shares shot up 8% in intraday trading Monday.
According to a Securities and Exchange Commission filing, the company will be asking “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,” at its annual shareholder’s meeting.
Tesla has yet to disclose how many shares investors would receive. Though its last split, which took place in 2020, gave shareholders five shares for every share they owned.
“Given how well the stock has done since the last split, this wasn’t a surprise,” said Dan Ives, tech analyst with Wedbush Securities.
Despite the news, the company’s production may be affected by the recent shutdown of its Shanghai factory as it prepares for a Covid-related lockdown. Furthermore, supply chain issues continue to impact the industry as a whole.
“We advise investors to sell the rally in Tesla shares, as the stock faces no fundamental upside catalysts,” David Trainer, CEO of the investment firm New Construct said. “Tesla’s first-mover advantage in the electric vehicle space is fading fast.”