Al Root
Investors can mark their calendars. Tesla has scheduled its 2022 annual meeting of stockholders.
It will be held on Aug. 2, in Austin, Texas. This meeting matters a little more than others because it will clear the way for another stock split.
Investors like the idea of a stock split because of what happened last time. Tesla (ticker: TSLA) split its stock in August 2020 and shares rose more than 60% in the two and a half weeks between the announcement and the actual split.
Back in March, Tesla said it was planning another split, but this second split in the past couple of years requires a shareholder vote to increase the actual number of shares authorized in the company's by-laws. That will take a vote at the annual meeting.
The vote should be a formality. Investors aren't likely to vote that idea down.
There aren't any details of the split in Tesla's press release from Monday. Investors will have to wait a little longer for information like the ratio of the coming split. The split in 2020 was 5-for-1.
The most optimistic view of stock splits is they signal something positive about management's expectations for a business. A less optimistic view is that value doesn't change and that a split isn't a significant event.
Tesla stock isn't doing much immediately following the announcement. Shares were down 0.3% in premarket trading. S&P 500 and Dow Jones Industrial Average futures both fell about 0.1%.
Coming into Tuesday trading, Tesla stock has fallen about 18% year to date. Most of that drop came in April amid a broader selloff in the market and some declines after CEO Elon Musk announced his plans to buy Twitter (TWTR).
Tesla shares fell 19% in April.
Write to Al Root at allen.root@dowjones.com
$(END)$ Dow Jones Newswires
May 03, 2022 07:00 ET (11:00 GMT)
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