Tesla’s second stock split in 2 years a welcome catalyst

AT an annual meeting last Thursday (Aug 4), Tesla shareholders greenlit a 3-for-1 stock split that is poised to take place on Aug 24. Essentially, shareholders will get 2 additional shares for every share of Tesla they hold on the Aug 17 record date, while trading on a split-adjusted basis will start from Aug 25.

Since the electric-vehicle (EV) maker first mooted the idea of a stock split in March, the counter has outperformed the Nasdaq, surging roughly 50 per cent from a 52-week low of around US$620 in May to close at above US$925 on Aug 4. The rally came on the back of better-than-expected Q2 earnings, as well as a US$430 billion bill in the United States that is expected to deliver - among other things - EV tax credits.

Tesla closed 6.6 per cent lower at US$865 on Friday (Aug 5), however, partly due to some profit-taking on the news of the confirmed share split. The counter is also below its 52-week high of over US$1,240 per share, which at the time saw its market capitalisation crossing into the trillion-dollar territory.