Opinion: New Tesla Stock Split Would Reward Shareholder Support

Tesla’s proposed stock split would reward shareholders for their support. Tesla’s recent filing with the US Securities Exchange Commission shows that it wants to split the stock so that the company can pay a stock dividend to its shareholders. Tesla announced on Twitter that it will ask shareholders to vote during the annual meeting to authorize additional shares in order to enable a stock split.

Tesla will ask shareholders to vote at this year’s annual meeting to authorize additional shares in order to enable a stock split.

— Tesla (@Tesla) March 28, 2022

At the next shareholder meeting, Tesla will ask shareholders to vote on authorizing a stock split, the company announced on Twitter. According to a filing with the US Securities Exchange Commission (SEC), Tesla noted that it wants to split the stock so it can pay a stock dividend to shareholders. This type of dividend comes in the form of additional company shares instead of cash and does not affect the value of the company. However, such a dividend  dilute its share price. CNBC explained further:

“If there is a 6-for-1 split, investors will get a stock dividend of five shares for every one share of Tesla they own. This would be a one-time event.”

This is the second time Tesla is splitting its stock. The first time was in 2020 when the stock price soared.

Tesla Stock Split Would Reward Shareholders

I think this is Tesla’s way of saying thank you to the shareholders who have steadfastly supported the company during its harder times. Sadly, I had to sell my shares, but I do play to reinvest soon. I believe in Tesla and its mission and have been very transparent about that.

There have been a lot of misleading reports, misinformation, and even disinformation put forth by various organizations and individuals about Tesla and Elon Musk, but long-term shareholders have held their faith during those intense times.

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